Promoting Cooperative Role in Business Cooperation

10:11:36 AM | 24/11/2020

Promoting production and business connectivity along the value chain is gradually becoming the optimal method for sustainable business development. Fostering the cooperative role will be the center of connectivity between producers and businesses, especially in the agricultural sector.

Cooperatives are an important model that contributes 10% to the world’s gross domestic product (GDP), affect half of the global population, serve as the hub of production and consumption connectivity and promote value chains. In Vietnam, they are defined as an instrument for poverty reduction and a solution to achieve sustainable development. This model is also a tool to formalize and transform informal economy and employment into formal ones. In addition, they mitigate adverse effects of climate change due to its characteristics and principles of care and action for the community.

According to Ms. Nguyen Thi Luyen, Deputy Director of the Business Reform and Development Research Department under the Central Institute for Economic Management (CIEM), linking cooperatives in business will help ensure production stability for all stakeholders, including farmers, cooperatives and enterprises. Farmers only produce and sell raw products to the market. When they are united, their products will be processed to a certain extent, depending on market demands. The role of business association and cooperatives is illustrated by increasing the added value and raising product quality in each stage of connectivity. In addition, it will ensure shared risks and interests among stakeholders when there is a change.

At the recent workshop on “Promoting cooperative role in business cooperation for sustainable development” organized by CIEM, Mr. Nguyen Tien Dinh, Deputy Director of Cooperative Economy Board under the Cooperative Economy and Rural Department, the Ministry of Agriculture and Rural Development, said the cooperative model not only helps economic growth but, more importantly, increases the income for 30% of the country's population.

The role of cooperatives is expressed more clearly when the country faces economic crisis, natural disasters, epidemics, he added. Cooperatives are playing its role in sustainable business development cooperation. Vietnam has 17,462 agricultural cooperatives and 57 agricultural cooperative associations with 3.78 million members. They contribute 4% of the nation’s GDP. The average revenue and profit of a cooperative is VND2.44 billion and VND383 million, respectively.

Emphasizing policies on cooperative economic development in recent years, Dr. Pham Minh Dien, Deputy Director of the Cooperative Policy and Development Department under the Vietnam Cooperatives Alliance, said, to promote cooperative development, the government issued many support policies illustrated in decrees and circulars. Cooperatives are supported with finance, human resource training, trade promotion, market expansion and new technology. However, existing policies have many shortcomings.

Therefore, to promote the cooperative role in business cooperation, policies need to be further reformed and perfected for collective and cooperative economic sectors to develop in the new context.

Accordingly, it is necessary to further raise awareness about the nature, position and role of cooperatives in socioeconomic development; allocate budget resources to meet practical needs of collective and cooperative economic sectors in line with national target programs on new rural development and on sustainable poverty reduction. In particular, building laws and policies on collective and cooperative economic support must be consistent with the market mechanism, ensure consistency and feasibility, foster activeness and self-responsibility of collective economic organizations.

By Thu Ha, Vietnam Business Forum