On June 8, 2017, the Vietnam Farmers’ Union (VNFU) in association with the Ministry of Planning and Investment, and IFAD Vietnam held a workshop on reviewing the Draft of a new Decree on organization and operation of cooperative groups as the replacement for the Decree No. 151/2007/NĐ-CP dated October 10, 2007. The workshop was coordinated by VNFU Vice Chairman Central Committee Luong Quoc Doan, Deputy Minister of Planning and Investment Dang Huy Dong, and Representative of IFAD Vietnam Nguyen Thanh Tung.
During the opening speech, Deputy Minister Dang Huy Dong denoted that cooperative groups along with cooperatives were a crucial part of the economy. Given the present state, as a major number of household producers were underdeveloped and small-scale, the form of linking and cooperation in the small and medium scale of production was particularly efficient. It would help optimize the use of resources and through this the quality and the production, business efficiency would also be improved.
In general, the scale of cooperative groups is still small with very little capital and properties. Many cooperative groups are infrequently active, seasonal, spontaneous, lack instruction and consultancy from the local government. Most of them currently struggle when it comes to trading, business, bank loans, access to legal documents due to their scale, technology level, and limited capital and market. However, the cooperative group sector has been taking its very first step to affirm its importance such as creating job, improving income, settling the political-security situation in the community, etc.
The Draft is prepared in order to create a clear legal framework to support cooperative groups and other kinds of groups whose formation and operation based on the cooperation between their members under the provisions of the Civil Code 2015. The Draft continues to keep the merits of Decree No. 151/2007/NĐ-CP and meets the following requirements: correcting shortcomings of the current legal framework on the organization and operation of cooperative groups; preparing the best legal framework for cooperative groups, and assuring the rights and obligations of their members and the third party involving in a civil contract with cooperative groups.
Furthermore, it also provides cooperative groups with a solid legal status that proves their position and credit to their members and partners; helps the authorities monitor the development status, administer and support the operation of cooperative groups; and facilitates to build policies and mechanism on developing collective economy in general and cooperative group economy in particular.
At the workshop, Dr. Le Duc Thinh, Deputy Director-General of Department of Cooperatives and Rural Development, indicated 3 points that needed to be clear in his speech on the role of the support of agricultural professional organizations in Vietnam for the development of farm household economy: the role of agricultural professional organizations (APOs) in the development of farm household economy; experiences on building APOs in other countries; and finally, how to develop APOs and improve the role of FU in the vocational society of Vietnam.
Dr. Le Duc Thinh cited that, in the particular condition of Vietnam, for the time being, the best way to develop and improve APOs was to call for the participation of FU in some functions of APOs, especially the function of protecting the rights of farmers and producers. The advisory and supervision function assessed the implementation of the local development support policies. The participation of VNFU in the implementation of the APOs’ functions was also compatible with the policy and guideline of VNFU on renewing the functions and activities of the union in the era of industrialization and modernization which was in progress.
On the role of VNFU, Deputy Director of VNFU Economy Department Pham Huu Van pointed out some groups of measures to enhance the aforementioned role. They included propagating the role, the position, and the impact of the collective economy sector in the development of the farm household and farm economy. Through raising the awareness of farmers and members, FU’s officers would actively appeal to them for taking part in building and developing forms of collective economy compatible with their area.
Moreover, levels of FUs needed to step up their activities in consultation and guidance cooperative groups to transform into cooperatives, such as production cooperative, service cooperative, joint-stock cooperative, etc. FUs should be the agent to connect local farmers and members that tended to form any kind of collective economy and also guide them through the process and the procedure following the Civil Code and the related Decrees and other by-laws regarding the form and the operation of the cooperative group, and how to develop into cooperative, or form a cooperative. Also, the need of reinforcing the connection between grassroots level FUs and forms of the collective economy was pointed out.
At the workshop, province-level FUs highly evaluated the Draft. From the experiences regarding agriculture, farmers, rural area and the development of collective economy, delegates expressed their interest in the instruction and support for developing cooperative groups, budget for propagation and its support for collective economic development directly to local FUs, financial policy, facilitating the “nuclear” in a rural area, special support policy for agricultural cooperative groups, etc.
To conclude the workshop, VNFU Vice-Chairman Luong Quoc Doan affirmed that VNFU works very effectively in supporting to form of cooperative groups because the union was organized at the grassroots level in every region. Currently, the Union had prepared the proposal on reorganizing grassroots level unions and professional groups which would be the premise of forming cooperative groups and cooperatives. At the present, VNFU is changing its operation, focusing on reorganizing the production in the rural area. The types of cooperative groups vary from region to region with different scales, though only a few successful cooperative groups registered with the authority. Therefore, the aim of this new Decree is to create a legal framework and facilitate cooperative groups to develop, prepare National administration policies and mechanisms with regard to cooperative groups.
The Vice-Chairman acknowledged and commended the proposals of delegates at the workshop and assigned VNFU International Cooperation Department to gather all of the proposals for the Draft and then send them to the Standing Committee of each province and city to review one more time, and finally submit to the Ministry of Planning and Investment so that cooperative groups could fully develop in the future. (VNFU)
According to reports of 48 out 63 provinces and cities, currently, there are approximately 68,364 cooperative groups formed and operating under the Civil Code 2005, 35,570 of which are certificated, 3,365 are deactivated and 154 changed to different forms.
The cooperative group sector attracts 1,166,327 members , creates full time jobs for 805,123 labours, makes average income of 811 million dong per year for each cooperative group in 2016 with average profit of 369 million dong per year, and income of 79 million dong per year for a cooperative group’s regularly active labour.
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