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«DEVELOPMENT STRATEGY OF THE AGRICULTURAL COOPERATIVES IN THE MEKONG DELTA, VIETNAM: SIGNIFICATION OF DIVERSIFICATION INTO BUSUNESS AND ACTITITIES ...»

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4.3 Research Methodology

4.4 Results

4.4.1 Descriptive statistics of research results

4.4.2 Agricultural cooperative contributions to farming practices

4.4.3 Contribution of ACs in improving farming practices

4.4.4 Reasons for the low proportion of farmers’ enrolment in a ACs.................116 4.4.5 Suggestions to increase ACs contributions to farming practices................119

4.5 Summary

CHAPTER V: SUCCESS OF ACs IN THE MEKONG DELTA

5.1 Introduction

5.2 Criteria for Success

5.3 Objectives

5.4 Research Method

x

5.5 Research Results

5.5.1 Description Status of Phu Thanh and 3A Canal ACs

5.5.2 Successful services offered by both Phu Thanh and 3A Canal.................127 5.5.2.1 Irrigation service

5.5.2.2 Combine harvester service

5.5.2.3 Provision service for good quality seed

5.5.2.4 Credit for Member Service

5.5.3 Each cooperative’s individual successful services

5.5.3.1 Services offered by only Phu Thanh

5.5.3.2 Services offered by only 3A Canal

5.6 Factors affecting AC success

5.6.1 Factors affecting the success of both Phu Thanh and 3A Canal.............134 5.6.2 Factors affecting Phu Thanh’s success only

5.6.3 Factors affecting 3A Canal’s success only

5.7 Summary

CHAPTER VI: DEVELOPMENT STRATEGY OF ACs IN MD, VN……………..141

6.1 Introduction

6.2 Research Methodology

6.2.1 Design research method.

6.2.2 What is SWOT and how does it apply?

6.3 Summary of Previous Discussions

6.4 Author Opinions for Development strategy of agricultural cooperatives......145

6.5 Goals and Objectives

6.6 Analyse Farmers’ Demand on ACs’ Business and Activities.

6.6.1 Demand for an irrigation service

6.6.2 Demand for machinery utilization

6.6.3 Demand for Agricultural Extension

6.6.4 Demand for cooperation in marketing and material supply.................148 6.6.5 Demand for Loan and Save capital

6.6.6 Demand for partnership with suppliers in input supply services........149 6.6.7 Demand for changing crop because narrowing paddy field in MD.......149

6.7 SWOT analysis of ACs in the Mekong Delta, Vietnam.

xi 6.7.1Strategy S+O (Strengths + opportunities)

6.7.3 Strategy S+O and W+O

6.7.2 Strategy S+O and S+T

6.8 Stages development of service in Agricultural cooperatives

6.9 Implementation strategies

6.9.1 Short term strategy

6.9.2 Long term strategy

6.10 Other strategies development of ACs in Mekong Delta.

6.10.1 Organization single or primary AC and multi-purpose AC models......156 6.10.2 Organize Regular member and Associate members.

6.10.3 Organize the Agricultural Cooperative Union.

6.11 Improve legal framework and macro policies

6.11.1 Subsidizing farmer through ACs

6.11.2 Improving other legal frameworks.

6.12 Conclusions

CONCLUSION OF THESIS RESEARCH

APPENDICES

Appendix 1: Mekong Delta Provinces

Appendix 2: Questionnaire for Member of agricultural cooperatives..................166 Appendix 3: Questionnaire for Non-Member of agricultural cooperatives.........173 Appendix 4: Maps of Vietnam and the Mekong Delta region

Appendix 5: Dike system and Irrigation service

Appendix 6: Electrical Power pump station of ACs

Appendix 7: Process vegetable of ACs in Long An

Appendix 8: Other services of ACs

BIBLIOGRAPHY Bibliography

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Figure 1: Percent Contributed GDP of Collective Economy

Figure 2: No. Cooperatives and ACs in Vietnam

Figure 3: Classification Name of Cooperatives in Vietnam (2010)

Collective economy (including cooperative and cooperatives groups farmers) has

been quite significant to the national economy (GDP) and itself ACs. Figure 4:

Percent Growth & Contributed GDP of Collective Economy

Figure 5: Capital and Profit/AC compared with other type Cooperatives (2010).55 Figure 6: Total Revenue and Capital of ACs by regions in Vietnam (2005).........55 Figure 7: No. ACs in Vietnam, Japan, USA and Korea

Figure 9: Difference Percent Farmers Join ACs between North and South, Vietnam

Figure 10: Educational Level of AC's Management in Vietnam(2011).................74 Figure 11: Classify & Ranking of AC in Mekong Delta

Figure 12: Educational level of ACs' Director in MD & VN (2004)

Figure 14: Ratio increase between No. AC & Member of AC

Figure 15: Average Capital of One AC by province in MD (2006)

Figure 16: Average Share Capital of one AC (2006)

Figure 17: Idea about AC' Service Fee Is Cheaper than AC' Competitors............94 Figure 19: Member & Non-member Percent using AC services

Figure 20: Number of Members & Non-members and service’s use

Figure 21: Rice Sowing Method at P0(2007) & PT(2011)

Figure 22: Seed Level Used by Members Group at P0(2009) & PT

Figure 24: Correlation between Fertilizer/Pesticide cost & Training.................115 Figure 26: Reasons for NOT Joining Agricultural Cooperatives





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Table 1: Business Environment Analysis Model

Table 2: AC Differences between North & South (2010)

Table 3: Services of Agricultural Cooperatives in Vietnam (2005)

Table 4: No. AC's Improved Business Result

Table 5: Phu Thanh AC's Situation at Establishment, Merger and Current.......67 Table 6: Difference Number of ACs Report by VCA and MARD

Table 7: Difference between Transformed & Newly Established ACs..................76 Table 8: Business and Activities offer by ACs in the Mekong Delta (2010)..........81 Table 9: Situation of ACs in Mekong Delta from 2000-2010

Table 10: Average Member, Labors, Capital and Revenue of a AC in MD...........85 Table 11: Advantages of Combine Harvest Compared Traditional Harvest Rice in MD

Table 12: Full-time and Part-time Labors in ACs

Table 13: Difference profit/ha between Member and Non-member of AC in An Giang

Table 14: Cost by ACs and by Farmers

Table 15: Surveyed Agricultural Cooperative, Rating and Services

Table 16: Descriptive Statistics Characteristics of Member & Non-member.....100 Table 17: Profit/ha of Rice between Member (GA) & Non-member (GB)............102 Table 18: Differences Yield, Selling Price & Revenue GA&GB, P0&PT.............103 Table 19: Correlation of Revenue to Yield & to Selling Price/kg

Table 20: Irrigation Cost by Individual Farmers and by ACs Services...............104 Table 21: Harvest Cost/ha by Hand and by Combine Harvester

Table 22: Components of Cost & Production Cost/ha of Rice of GA&GB............109 Table 23: Services ACs Should Perform

Table 24: Status of Phu Thanh & 3A Canal ACs

Table 25: Activities and Services of Phu Thanh and 3A Canal ACs

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Table 27: Advantages of Combine Harvest Service by ACs

Table 28: Achievement of Business in Phu Thanh, 3A Canal ACs (2011) & MD (2010)

Table 29: Phu Thanh AC at Establishment, Merged and Current

Table 30: SWOT Matrix Analysis of ACs in MD, Vietnam

Table 31: SWOT Analysis of ACs in MD and Strategy Development Services in ACs.

Table 32: Fourth Stages Development Service Model in ACs

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Picture 1: Irrigation use diesel engine by individual farmer in An Giang province

Picture 2: Irrigation use electrical power by ACs in An Giang province.............106 Picture 3: Harvest rice by hand and by Combine harvest machine

Picture 4: Irrigation individual farmers (diesel engine) & by ACs (electrical power)

Picture 5: Harvest rice by Hand (traditional way) & by Combine Harvester machine

Picture 6: ACs contributed to rural development

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GSO General Statistic Office ICA International Cooperative Alliance JA Japan Agricultural Cooperative MARD Ministry of Agriculture and Rural Development

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MPI Ministry of Planning and Investment P0 The period before GA & GB Began Receive AC's Service PT The period After GA & GB Began Receive AC's Service VCA Vietnam Cooperative Alliance

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Appendix 1: Mekong Delta Provinces

Appendix 2: Questionnaire for Member of agricultural cooperatives..................166 Appendix 3: Questionnaire for Non-Member of agricultural cooperatives.........173 Appendix 4: Maps of Vietnam and the Mekong Delta region

Appendix 5: Dike system and Irrigation service

Appendix 6: Electrical Power pump station of ACs

Appendix 7: Process vegetable of ACs in Long An

Appendix 8: Other services of ACs

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1.1 Introduction Vietnam’s Agricultural cooperative (AC), in general, and the Mekong Delta’s (MD) Agricultural Cooperative, in particular, have been developing since 1954 with many historical ups and downs. During 1954-1975, ACs developed only in northern Vietnam, and none existed in southern Vietnam because of wars. The government expanded the AC from North to South Vietnam during 1975-1995.

However, during period 1975-1995, ACs in Vietnam largely collapsed and could not conduct activities after Vietnam became a market-oriented economy in 1986.

In 1996, the government introduced the new AC model following the International Cooperative Alliance (ICA) model and enacted the First Cooperative Law. In addition, the government promulgated many resolutions, decrees and circulars to promote the new AC. AC entered another development period, improving business activities, members, capital and property. However, cooperatives and ACs in Vietnam still have encountered many opportunities and challenges after the cooperative Law has affected and other policies related on AC have enacted.

As the result, Vietnam’s Cooperative, in general, and Agricultural cooperatives (AC), in particular, have not been contributing significantly to the national economy and themselves. According to Vietnamese government, the collective economy as the core cooperative (including cooperative, ACs and cooperative groups) plays an important role in the national economy. It is one of

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contributed to reduction of poverty in Vietnam. However, the contribution of the collective economy to gross domestic product (GDP) has decreased continuously since 1996. For example, Figure 1 shows that in 1996 the contribution of collective economy to GDP was 10.0%, 8.6% in 2000, 7.5% in 2003, 6.8% in 2005 and only 5.2% in 20102. In 2010, the contribution to GDP from the State Owner Economic sector was 33.7%, 30.8% from the Individual Economic sector, 18.7% from the Foreign Direct Investment (FDI) economic sector and 11.5% from the Private Economic sector.3 12.0 % 10.0 10.0 8.8 8.6 8.1 8.0 7.5 8.0 8.9 8.9 7.1 6.8 6.0 5.2 4.0 2.0

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Figure 1: Percent Contributed GDP of Collective Economy On the other hand, the growth ratio of the collective economy is low and tends to decrease. It was 4.0% in 2005, compared with 3.0% in 2008 and only 3.2% Five economic sectors in Vietnam: The state-owned, collective economy (including 1 cooperative and cooperative groups), individual economic (no state share holder), private economic (household business) and FDI.

2 General Statistic Office of Vietnam 2011 3 General Statistic Office of Vietnam 2011 & Ministry of Planning & Investment (MPI), May

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20055.

However, I can observe some agricultural cooperatives in the Mekong Delta region to measure level of success because of many reasons such as: improving of macro policies, increasing operational capacity of ACs, providing significant in diversification services to farmers of ACs and other reasons. Many ACs in the Mekong Delta has been success since 2005 such as Phu Thanh, Vinh Trach, Long Binh ACs(An Giang province), Tan Hiep A, 3A Canal ACs (Kien Giang Province), Tan Cuong (Dong Thap provice), Binh Tay AC (Tien Giang Province), Tam Vu AC (Long An province)…These ACs have been succeed because they provide more services to both members and non-members, increase rapidly in volume, be balance between economic and social activities, develop themselves, receive prizes from state government and other reasons.

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discovery development strategy of the agricultural cooperatives in the Mekong Delta, Vietnam.

1.2 Background 1.2.1 Definitions Cooperative (hợp tác xã) and ACs (hợp tác xã nông nghiệp)

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and aspirations through a jointly-owned and democratically-controlled enterprise.

MPI, summary report of implementation cooperative law in 2003, May 2012, pp6-7 4 VCA, report 2011, pp2-4 5

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equality, equity and solidarity.

ICA also classifies principle of cooperative that the cooperative principles are guidelines by which cooperatives put their values into practice. These principles

are:

i) Voluntary and Open Membership – Cooperatives are voluntary organizations, open to all people able to use their services and willing to accept the responsibilities of membership, without gender, social, racial, political or religious discrimination.

ii) Democratic Member Control – Cooperatives are democratic organizations controlled by their members, who actively participate in setting their policies and making decisions. Men and women serving as elected representatives are accountable to the membership.

iii) Members’ Economic Participation – Members contribute equitably to, and democratically control, the capital of their cooperative. At least part of that capital is usually the common property of the cooperative. Members usually receive limited, if any, compensation on capital subscribed as a condition of membership.



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