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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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Thai government has many special policies and support to ACs. For example, the cooperative movement in Thailand had its first master plan – “Cooperative Development Plan 2003-2006” in 2003. This plan was regarded as a “road map” for development of cooperative movement. It was the outcome of joint efforts of those in the cooperative movement and the general public. As a result of the six strategies clearly outlined in the master plan, significant progress has already been noted. Because of this master plan, the Cooperative Act has been amended to allow for greater flexibility. The Act is now being reviewed by the parliament.

There is very strong support from the government to ACs. For example,

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for agricultural cooperative development. The important development schemes, among others, are the establishment of central markets for agricultural products in 870 villages and 20 bigger product distribution centers throughout the country. Moreover, CPD have launched a Mini MBA program for management staff of the cooperatives throughout the country.

1.6.3.3 Agricultural cooperatives in Malaysia23 The British introduced the cooperative movement in Malaysia in 1922 as a means of tackling widespread indebtedness of rural farmers and government servants. Since then, the movement has been regarded as a benevolent institution to alleviate the social and economic status of the less privileged section of the Malaysian society. Initially all cooperatives, regardless of rural, urban, agro or fisheries’ based were under the supervision of the Cooperatives Development Department. However, in the 1970’s, with the rapid growth of the cooperative movement and its manifestation in the general economic development of the nation, has made it necessary for the Government to introduce measures for the continued health of the movement.

Agricultural-based cooperative organizations in Malaysia are of two

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these were in the land schemes managed by the Federal Land Development Authority (FELDA) and the Federal Land Rehabilitation And Reconsolidation Authority (FELCRA).

At present, the FOA has 422 Agriculture Cooperatives under its wing,

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marketing, processing and other business activities that benefits its members.

The FAs also enjoy similar support from the Government through the FDA.

Membership of ACs are approximately about 699,500 registered farmers

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ACs in Malaysia provides these services follow: Commercial and technology transfer program such as the flagship projects, nucleus estates, incubator projects and land lord in trust schemes; Institutional support services

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Commodity based human development and Farmers Unit development.

1.6.3.4 Agricultural cooperative in the Philippines24.

The history of Agricultural Cooperatives in the Philippines may be subdivided into four waves namely: (1) First Wave: During the American Regime; (2) Second Wave: The immediate post-war period; (3) Third Wave: Martial Law Regime; (4) Fourth Wave: Under the Restored Democracy.

During the First Wave, the Rural Cooperative Bill was introduced in Dennis B. Araullo, 2006, Agricultural Cooperatives in the Philippines, 2006 24

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cooperative law in the country and was patterned after German cooperatives based on Raiffeisen experience.

In 1927, The Cooperative Marketing Law was passed, giving the Bureau of Commerce and Industry the responsibility of organizing farmers into marketing cooperatives.

From 1942-1945 the cooperatives ceased to function because of the World War II.

During the Second Wave, Republic Act 583 Created the Small

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pre-cooperative organization called Samahang Nayon. Benefits would include the right to borrow funds from government banks and the assurance of being supplied with farm inputs.

During the fourth wave, 1990, the Cooperative Code of the Philippines was enacted as well as the creation of the Cooperative Development

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by members of NATTCO landed a seat in the House of Representatives after garnering over 2% of the votes of party elections.

Membership: The Philippines adheres to the basic principle of cooperativism on membership which means that cooperatives are

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of which are secondary upward to one or more organizations Business and service from an agribusiness standpoint, the business activities and scope of the agricultural cooperatives in the Philippines cover the functions including input supply, production, post-harvest, processing and marketing. Credit and financing are also engaged in by

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the multi- purpose cooperatives by providing the input requirements of its members. Very few cooperatives however engage in bulk purchase of input supply. Needless to say, most of the agricultural cooperatives in the Philippines are either too small or have not yet fully matured to take on agro-industrial activities such as processing.

Some of the more common activities being handled by the typical

agricultural cooperative are as follows:





Cash Trading: This is business done on a cash and carry basis. The customer enjoys at least the use of the goods and services for cash

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operations. Finally, it is a way of increasing growth.

Selling at Market Price: Cooperatives offer goods and services at prevailing market prices. This promotes stability. It can cope with operational expenses and cover up the negative effects of shrinkage, depreciation and losses. It helps maintain the prices of goods.

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communities through the production of high quality goods and provision of better services. Cooperatives could help by patronizing only standardized products and services of high quality. Hence, different types of cooperatives will strive to improve their goods and services to stand competition with business establishments. This, in turn, will be instrumental in improving life in the country.

Cooperative wholesale business or interlending (cooperative bank):

Cooperatives can be organized with enough people and capital. They respond to the needs of the community. The expansion of membership may result in wholesale business. In fact, to be effective, wholesale business, interlending (cooperative bank), could be done by primary societies. Defects from retail business could be avoided. The benefits from the wholesale are considerable.

Members can market and acquire the goods and services at the right price and quality. They can even lower and raise savings. They can also influence the production of badly needed goods and services;

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When audit shows that the cooperative is not capable can afford the minimum wage, only employees get paid regularly. The government can give exemption.

Furthermore, laws may allow exemption from income and sales taxes.

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its objectives are achieved, the movement can take its rightful place in the development of the country.

1.6.4 Agricultural cooperatives theory in Vietnam Up to 1986, Vietnam used to be a developing country which followed the Soviet model of central-planning. Both trade with capitalist economies and the

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transition from the socialist central-planning system to a market economy, and the opening up to the world markets was much quicker than in most other countries in Southeast Asia previously. Farmers had to adjust to the challenges of international competition and globalization in a much shorter period than most of their colleagues elsewhere. (Axel Wolz and Pham Bao Duong, 2008.)

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1.7.1 Research Design Vietnam classifies into ten types of cooperatives in including agricultural cooperative and agricultural cooperative usually consist of haft of national cooperative. Therefore, I select to research on agricultural cooperative.

According to the secondary data and report from the General Statistic Office of Vietnam, I find out problem statements of agricultural cooperatives in the Mekong Delta, south of Vietnam that agricultural cooperative is lowest development index compared with 8 economic regions in Vietnam but some agricultural cooperatives are very success broken through business and activities and management. In addition, I observed differences between North and South Vietnam in the situations and characteristics of AC. For example, ratio of farmers in South enrolment in ACs is lower than that of in North, but Farmers in South contribute money to buy share from AC and get dividend annually, on the contrast, many farmers belong to transformed ACs in North do not buy share and get no dividend from ACs. Otherwise, 79.5% of newly established ACs are in South of Vietnam25, Mekong Delta consists of 30.7% number of national ACs compared with eight economic regions26 in Vietnam27. The development index of ACs in Mekong Delta is lowest compared with that of other eight economic regions in country but Mekong Delta is been famous with some special successful ACs 28.

VCA, report 2011, p6 25 The eight economic regions include: Northeast, Northwest, Red River Delta, North Central 26 Coach, South Central Coach, Central Highlands, Southeast and Mekong Delta 27 MARD report 2005 VCA, report 2011, pp3-4 28

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1.7.2 Sampling Design Situation of Mekong Delta’s, in particular, is different between from other regions in Vietnam. Therefore, this study designs to collect general information of agricultural cooperatives in Vietnam to readers who are not familiar with agricultural cooperatives in Vietnam. Then, the study presents detail situation of ACs in the Mekong Delta, South of Vietnam and other data, field surveys also in the Mekong Delta.

Secondary data were collected through reports of VCA, MPI, MARD and General Statistic Office of Vietnam.

The primary data was collected by many methods includes Data is related presents current situation of agricultural cooperatives in the Mekong Delta.

The case studies of agricultural cooperatives in the Mekong Delta explore reasons that agricultural cooperatives are lowest development index but it appears some successful agricultural cooperatives.

The field surveys in An Giang province and did field visits to seven successful ACs in the Mekong Delta.

Field visits all seventh ACs in the list of the national 100 best ACs Finally, the research present a strategy development of agricultural cooperatives in the Mekong Delta, Vietnam and the paper focuses to discover solutions for diversification services in agricultural cooperatives as the sustainable development key.

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1.7.3 Data Collection Procedure The research uses both qualitative and quantitative methods to collect data primary and secondary data related on agricultural cooperatives in Vietnam and the Mekong Delta. Secondary data were collected through reports of Vietnam Cooperative Alliance (VCA) and VCA’s office in 13 provinces and a city in the Mekong Delta from 2000 to 2010. Moreover, other secondary were collected through reports of Ministry of Planning and Investment of Vietnam (MPI), Ministry of Agricultural and Rural Development (MARD), General Statistic Office of Vietnam (GSO).

In addition, I would like to find out difference between farmers, who are members of agricultural cooperatives, and farmers, who are non-members of agricultural cooperatives. I called Group A (GA) for members of ACs and called Group B (GB) for non-members of ACs.

The sampling was selected by random sampling method and surveyed using a questionnaire based on farming households in agricultural cooperative area. All interviewees are living in the same hamlet and cultivate their farmland in agricultural cooperative area. Some of them are members and other are non-members of agricultural cooperative. Non-members had farmland in the same area as members and used some of the same AC services used by members As result, I interviewed 123 rice farmers for both GA and BG. Sixty-two of those interviewed were members of ACs(GA) and the other 61 were non-members of

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farming practices between P0 denotes the period before GA and GB began receiving AC services and PT indicates the period after GA and GB began receiving AC services. I measured the AC’s contributions to farming practices by comparing PT and P0 services. However, the limited data did not contain P0 values for several indicators. Therefore, I measured those cooperative contribution indicators by comparing the difference between GA and GB. This method cannot exactly measure the contributions of only the AC to farming practices; however, a relatively accurate contribution amount and trend can be measured because ACs provide many priority services to members and discount their service fees for members.

Finally, I use case studies of successful ACs because I would like to discover successful services and activities of ACs. Among the national best 100 ACs in 2011, recognized by the state government, seven are in the MD region including the Phu Thanh and 3A Canal ACs. Therefore, I visited all seven ACs in the MD to obtain general information on their activities and management. Next, I analysed the information of the seven ACs and selected the Phu Thanh AC (hereinafter, Phu Thanh) in An Giang province and the 3A Canal AC (hereinafter, 3A Canal) in Kien

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agriculture-dominated provinces29. Then, I returned to Phu Thanh and 3A Canal ACs. Next, I hosted a discussion group including all staff management, hamlet governors and four farmers, including two members and two non-members.

In 2011, the economic proportions of agriculture, industry and services were, respectively, 29

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the commune.

1.7.4 Method of Data Analysis The data analysis in this thesis consists of many components.

I used the Business Environment Analysis (BEA) tool analyzes macro, micro internal environment policies. The SWOT analysis tool builds strategy development of agricultural cooperatives.



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