Developing the collective economy for the successful implementation of ecological agriculture, modern countryside, and civilized farmers

Dr. BUI TRUONG GIANG and Associates
Vice President, General Secretary of the Central Theoretical Council
Monday, May 8, 2023 09:08

Communist Review - The views and policies on the development of agriculture, rural areas, and farmers are expressed uniformly throughout the documents of the Party. In particular, developing the collective economy plays an important role in restructuring production, promoting agricultural development, and improving the incomes and living standards of farmers under the objectives set by the Resolution of the 13th Party Congress.

Model of growing strawberries and hydroponic vegetables of BBFarm Agricultural Cooperative in Song Long Commune, Son Hoa District, Phu Yen Province _Photo: VNA

Resolution No. 13-NQ/TW on "Continuing to renovate, develop and improve the collective economy": An assessment of 20 years of implementation

Over the past 20 years (2002 - 2022), Resolution No. 13-NQ/TW, dated March 18, 2002, of the 5th Plenum of the 9th Central Committee on “Continuing to renovate, develop and improve the collective economy" has been effectively implemented, achieving outstanding performances in reforming and increasing the efficiency of the collective economy. Innovate thinking expressed in the Resolution has been institutionalized into laws and policies, creating a favorable institutional framework for the growth of the collective economy.

The institutional environment and supporting mechanisms and policies for collective economic development, the core of which are cooperatives, have been gradually improved. Collective economic actors have been gradually reformed, the old way of thinking and inadequacies have been gradually removed, cooperatives have developed in quantity and diversified in forms and fields, running toward a socialist-oriented market economy and international integration(1); the household economy has been enhanced to make its contributions to the socio-economic growth of the country. The cooperative economy increasingly asserts itself as a driving force in agricultural and rural development, capacity building of the peasantry, and new rural construction; thus contributing to maintaining socio-political stability, building a civilized lifestyle, protecting the environment, strengthening the spirit of cooperation and solidarity in the community, improving the people's material and spiritual life, especially in rural and mountainous areas. The effective leadership of the Party Committees at all levels as well as the close coordination between bodies of the Fatherland Front and socio-political organizations, the Vietnam Cooperative Union, and the Vietnam Farmers' Association have boosted the development of collective economy and forms of cooperatives.

In addition to the above positive results, the collective economy so far reveals some shortcomings. The weaknesses of the old cooperative model have not been completely overcome. The collective economy has not been commensurate with the potential, advantages, and priority given by the Party and State. Supporting policies of the Goverment for cooperatives lack efficiency and feasibility as they are not synchronized, consistent, and slowly implemented. Thus, they have not created a driving force for collective economic development. Many cooperatives have not been organized and operated in compliance with the Law on Cooperatives; The relationships of ownership, organization, management and distribution in many cooperatives are still far from the nature and values ​​of cooperatives. The growth rate of the collective economic sector is low and its contribution to the gross domestic product (GDP) is continuously decreasing; The role and contribution of the collective economy in general and cooperatives, in particular, is still limited(2). Cooperatives developed mainly in breadth and unevenly between agricultural cooperatives and non-agricultural cooperatives, and between regions throughout the country. The total number and the average number of members within a cooperative have been in decline. In the nutshell, the efficiency, stability, productivity, and competitiveness of cooperatives are low. Most of them have a small scale, are weak in internal force, facilities, science and technology level, financial potential, and staff, and have a limited scope of operation; They are not closely connected in terms of economy, society, and organization...

Thus, some of the goals set out by the Central Committee's Resolution No. 13/NQ-TW to remove weaknesses in the collective economy, and achieve a significant growth rate and share in GDP have not been realized. The collective economy, as well as the public economy, have not become an engine of the national economy and did not play to the fullest extent their role in changing from small-scale manufacturing to large-scale manufacturing.

Solutions to develop the collective and cooperative economy in the new period

Core guidelines

First and foremost, the collective economy is an economic component that demonstrates the nature and preeminence of socialism in our country, ensuring the socialist orientation. The public economy and collective economy are both solid foundations for the national economy. “Collective economic development is an inevitable trend in the context of international integration, in line with the socialist-oriented market economy; derived from real needs, protecting interests and creating favorable conditions for members to do business effectively and develop sustainably”(3). Developing a collective economy is an important way to boost internal resources and productive forces, and promote the involvement of household farmers in sustainable and effective value chains, thus contributing to building progressive and appropriate relations of production so that no one is left behind in the path towards socialism in Vietnam.

The second, collective economy is an important economic sector in the socialist-oriented market economy thanks to a full range of cooperative economic organizations in which cooperatives are core factors. Top priority is given to increasing the economic and social benefits of members and society, contributing to hunger eradication, poverty alleviation, and enrichment for members and the community. “Collective economy runs on the basis of private and collective ownership and under the principle of partnership. It does not depend on capital contribution; Outcomes are distributed according to the level of involvement, productivity, and capital contribution”(4).

The third, collective economic development creates an engine for the rapid, sustainable, and inclusive development of the country in terms of economy, politics, culture, society, environment, defense and security, and foreign affairs, maintaining political stability at the grassroots, social progress and justice, preserving ecological system, traditional culture, improving material and spiritual life, developing community, agriculture, and countryside.

The fourth, developing cooperatives under the rules of efficiency, quality and sustainability, voluntariness, equality, democracy, and mutual benefit to adapt to specific conditions of each locality and sector; respecting the laws of the market economy; meeting reality needs, gaining a head start by taking a shortcut, taking advantage of industry, sector and international development trends. Developing cooperatives in a comprehensive and diversified manner with different forms of partnership. Paying due attention to implementing effective ownership, management, and distribution to gain substantive efficiency under principles of collective ownership, improving operational efficiency, increasing membership and the number of cooperatives, and unions of cooperatives.

The fifth, collective economic development is an important and regular political task of the whole political system. Strengthening the leadership and responsibility of committees and leaders. The State has the responsibility to guide and support the collective economy to adapt to the law of the market and each stage of development of the market economy; improving the role and effectiveness of public governance; enhancing the role of representation and liaison of the Vietnam Fatherland Front with mass organizations, specifically the Vietnam Cooperative Union and other socio-professional organizations for effective, sustainable and inclusive development. Assessing accurately the efficiency of cooperatives, avoiding acting in haste or imposing rules; at the same time, preventing poor leadership that can lead to an uncontrolled situation.

Orientation of key tasks

Firstly, it is essential to renew theoretical thinking, raise awareness, and develop a foundational theoretical system on "collective economy" and "cooperative economy" in the new period.

The Party and State lead performance review and theoretical studies on the development of the market economy to assess the achievements of 40 years of Doi Moi and 50 years after national reunification and the path towards socialism and make initial preparation for reviewing, supplementing and developing the Party's Platform; It is important to study and develop a comprehensive theoretical system on the market economy in the new period. To radically remove the old way of thinking in the subsidized and centrally planned economy, it is necessary to clarify the concept and connotation of "collective economy", " cooperative economy", and "new model of cooperatives"; Consider a new model of cooperatives as a core form of collective economy and cooperative economy. The category of the cooperative economy is a typical and popular form of the market economy.

Secondly, due consideration should be given to improving the effectiveness and efficiency of public centralized governance in collective economy from central to grassroots levels; Strengthen the role of the Vietnam Fatherland Front and mass organizations, specifically the Vietnam Farmers' Union and the Vietnam Cooperative Union to develop cooperatives.

It is required to improve regulations on public governance by streamlining government apparatus, raising their efficiency; strengthening the role of the Ministry of Planning and Investment as a focal point in advising and managing cooperatives; appointing focal points to support cooperatives across the country; strengthening responsibility, promote the proactiveness, creativity, and coordination between ministries and authorities at all levels to accomplish tasks of developing cooperatives in the new period.

Accelerate administrative reforms, eliminate cumbersome administrative procedures, and abolish inadequate regulations that restrain the growth of cooperatives; increase the number of managers who are qualified, experienced, and enthusiastic; apply digital technology in the management of cooperatives; develop a national database on actors of market economy and forms of cooperative economy and cooperatives in a centralized, accurate, timely, transparent and smooth manner to raise management efficiency.

Enhance the role and capacity of the peasantry class as actors and members of a large number of cooperative economic forms in which cooperatives are the core factor; Improve the functions and tasks of the Vietnam Farmers' Union that plays the central role in conducting propaganda, mobilizing and supporting members and farmers to develop their capacity and boost efficiently and sustainably cooperatives; Establish and develop groups of professional farmers that can become groups of cooperatives.

Strengthen the role of representative organizations, consolidate and improve the position and operational efficiency of the Vietnam Cooperative Union system; clarify the functions, roles, and organization of the Vietnam Cooperative Union under the nature and current regulations and international integration trends; Government should invest resources to support cooperatives, providing services to grassroots cooperatives, performing public services for the people.

Strengthen the role of the Vietnam Fatherland Front, socio-political organizations, and socio-professional organizations in promoting the development of cooperatives at the grassroots level, especially in rural and mountainous areas; strengthen supervision and social feedback, protect legitimate rights and interests of members of cooperatives.

Thirdly, develop more coherent policies to promote the development of cooperatives, remove inadequacies in land, capital and credit, infrastructure, human resources, and markets to build new models of cooperatives adaptable to the Fourth Industrial Revolution, international economic integration, protection of natural resources and ecological environment; increase resilience to climate change, reduce damage caused by natural disasters, and ensure social security.

The increase of the efficiency of collective economy and cooperatives must follow strict principles of the market economy on voluntariness, and fairness in sharing the benefits of collective work based on contributions of land, capital, labor, and initiatives of members. Cooperatives must run under the principles of competition, guaranteed property rights, freedom of business, and competition to support and develop sustainably.

First of all, in terms of land resources, due attention should be paid to amending the 2013 Land Law and normative documents; continuing to review and use the existing public land for lease to cooperatives, creating the necessary initial land fund; Improving policies so that households can make a capital contribution to cooperatives in form of land use rights.

Second, in terms of capital and credit resources, it is necessary to develop a system of specific credit policies and special credit flow to boost the cooperative economy; Provide credit and unsecured loans by assessing business plans, and mortgage of cooperatives; Facilitate mortgage of land use rights or land attached assets or loans (for example, materials, machinery, infrastructure,...); Encourage the accumulation and efficient use of capital and collective property in cooperatives; Formulate specific regulations on credit institutions that are cooperatives, support policies on taxes, fees, facilities, etc for non-agricultural cooperatives; Supplement and perfect policies and regulations on audit, credit guarantee, insurance, start-up support, digital transformation, community-based agricultural extension... of cooperatives.

Strengthen the role of the Cooperative Development Assistance Fund, People's Credit Fund, Bank for Social Policies, the Cooperative Bank of Vietnam (Co-opBank), Bank for Agriculture and Rural Development (AgriBank), and other financial and insurance institutions in providing credit and insurance to run cooperatives.

Third, in terms of infrastructure, priority should be given to developing technical and service infrastructure for cooperatives; Foster investment in essential infrastructure to create a breakthrough for cooperatives in rural and mountainous areas, such as infrastructure for raw materials, production processing, irrigation systems, transportation systems, and commercial infrastructure, digital infrastructure, logistics infrastructure...

Fourth, in terms of human resources, science - technology, the State needs to strengthen the contingent of managers and develop cooperatives from central to local levels; support activities of human resources training and fostering, and increase the management capacity of members of various economic and cooperative forms. Cooperatives should select managers who are competent, trusted, ethical, and responsible. These must be freely elected by members of cooperatives. Adopt an adequate incentive policy for these managers. Formulate policies to support technological applications and transfer specific to each cooperative. Encourage businesses to help cooperatives apply science and technology.

Fifth, in terms of market development and production and business services, it is required to create and connect input and output markets to enhance cooperative economy; Provide consulting services to disseminate information about the market, credit, insurance, auditing, e-commerce, and so forth.

Breakthrough solutions

Firstly, it is recommended to fundamentally amend the Law on Cooperatives in 2012, in which it is necessary to focus on: 1- Ensuring the socialist orientation, ensuring the principles and good values ​​of cooperatives; 2- Encouraging cooperative sector to realize original goals which are serving members and developing internal market, and creating an open legal corridor for cooperatives and unions of cooperatives to expand into new markets like enterprises and other economic organizations; creating an open legal framework, ensuring the right to freedom of cooperation and association in production and business; Improve regulations on the nature of cooperatives, increase the number of members when they comply with the principles of cooperatives; Develop partnership in production, business, capital contribution; Vary forms of capital contribution by not violating the principles of equality and democracy in cooperatives, groups and unions of cooperatives; 3- The use of services of cooperatives, groups, unions of cooperatives, salary payment, income distribution, collective property, formation, use and management of funds must be in accordance with the principles of cooperatives and basic laws of the market economy; Cooperatives are allowed to provide services and products to its members, and also to do business in fields regulated by law to increase economic benefits on the basis of consensus of members; 4- Making specific regulations on supervision regime, clearly defining the responsibilities and powers of public agencies; stipulating sanctions to strictly handle acts of violations or policy profiteering of cooperatives.

Secondly, priority should be given to replicating effective and innovative business models, boosting innovation, and digital transformation, applying technological advances, and increasing the competitiveness and performance of cooperatives. Build and replicate innovative models of cooperatives associated with multi-value chains; Improve their dynamism and governance capacity; Develop green economy, circular economy, and organic farming; Strengthen climate resilience and reduce greenhouse gas emissions, promote national cultural identity and community. Conduct review and current reality assessments that enable the Central Government to make policies to replicate effective models of the collective economy in some localities and organizations.

Thirdly, improve institutions and policies on land to promote cooperatives to meet new requirements. Develop the market for land use rights in agriculture, perfect mechanisms and policies to promote land consolidation, and rearrangement of land parcels through cooperatives; Accelerate the progress of granting land use right certificates and transferring land use rights (lease, transfer, entrustment, capital contribution by land use rights...) of farmers and households so that they can actively involve in agricultural cooperatives; Complete regulations related to grating certificate of land use rights and attached assets for cooperatives, regulations on conversion of agricultural land to other purposes (building headquarters, production facilities...) to meet the needs of stable and long-term development.

Finally, it is essential to increase public investment in the cooperative economy; Allocate a part of the medium-term and annual public budget to develop the cooperative economy; Institutionalize and effectively implement Decision No. 340/QD-TTg, dated March 12, 2021, of the Prime Minister on “Strategy for collective and cooperative economic development from 2021 toward 2030" and Decision No. 1804/QD-TTg, dated November 13, 2020, of the Prime Minister on " Cooperative development support Program from 2021 to 2025" ./.


(1) By December 31, 2021, the whole country has over 27,000 cooperatives (including over 18,000 agricultural cooperatives and about 9,000 non-agricultural cooperatives), 2.5 times higher than in 2001 and increasing about 41% compared to 2013; The cooperative sector attracts nearly 6 million members and creates jobs for about 1 million workers. In 2020, the average revenue reached 4.3 billion VND, and the average profit was 314 million VND/cooperative, an increase of respectively 61% and 88% compared to 2013.

(2) Contribution of the collective economy to GDP was 8.06% in 2001, 3.99% in 2010, and 3.62% in 2020. The growth rate is slow, low, and precarious (only half of the growth rate of the whole economy) and tends to decrease continuously (4.92% in 2003, 3.98% in 2005, 3.32%, in 2010, and 2.4% in 2020). 

(3) Documents of the Fifth Conference of the Central Committee of the Party, term 13th, National Political Publishing House, Hanoi, 2022, p. 126

(4) Documents of the Fifth Conference of the Central Committee of the Party, term 13th, Ibid., p. 127

This article was published in the Communist Review No. 1002 (November 2022)