Lesson 2: Lack of capital, weak production plan

(Baonghean.vn) - For a long time, especially during the subsidy period, cooperative organizations became familiar and close to every rural person. Transitioning to the market economy period with diverse economic sectors, for many reasons including lack of capital, weak production plans, cooperative economy has somewhat faded away and not been effective.

Nghia Hoan Agricultural Service Cooperative (Tan Ky) was formed in the 60s of the last century, with the predecessors of Tu Lien Son and Mai Xuan Tien Cooperatives. After a period of ups and downs, in 1998, the Cooperative was re-established with the mission of trading fertilizers, plant varieties, pesticides, and irrigation services. Despite the development process, the Cooperative is currently facing many difficulties and production is at a standstill.

Mr. Ha Xuan Niem - Chairman of the Cooperative shared: Our Cooperative has 2,300 members of 14 hamlets, 85% of the population is engaged in agriculture, so the demand for fertilizers and plant varieties for each production season is very large, with about 60-70 tons of fertilizers, 16-20 tons of seeds/crop. To ensure the amount of fertilizers and seeds to serve the needs of the people, each crop requires about 300-500 million VND, but currently the capital of the Cooperative is very difficult. I myself am using my family's money of over 100 million VND to have capital to buy fertilizers and seeds for the Cooperative, and the family's land title must also be mortgaged to get capital for business. "Self-accounting and self-employment, we have to compete with a large number of fertilizer and seed businesses in the commune. Therefore, for the Cooperative to survive, we hope to be given conditions to have land for headquarters, and be granted a red book to mortgage for loans" - Mr. Niem shared.

The headquarters of Nghia Hoan Agricultural Service Cooperative has not been granted a certificate, causing difficulties in borrowing capital.

It should also be added that, currently in Nghia Hoan area, in addition to Nghia Hoan Agricultural Service Cooperative, there is also the newly established Nghia Hoan Livestock Cooperative and the Nghia Hoan Comprehensive Service Cooperative for Plant and Animal Breeds. Currently, the Livestock Service Cooperative has no headquarters, the remaining two Cooperatives are two old level 4 houses that are both offices and warehouses for transactions with people located on the same small campus of Nghia Hoan Commune People's Committee. A quick look at the facilities also shows the dilapidation and shortage of the Cooperatives.

During the process of writing the article, we also had the opportunity to go and listen to the aspirations of cooperatives as well as officials in the steering committee for collective economic development of the districts. Most of them were concerned about the situation of cooperatives without headquarters, land, or certificates to borrow capital. Mr. Le Trung Tam - Head of the project management board of Nghia Dan district said that currently, 100% of cooperatives in the district are borrowing land from the commune People's Committee to build working headquarters, no cooperative has been granted land for headquarters, business, or warehouse. Also because of the lack of collateral and other difficulties, up to now, no cooperative has been able to borrow preferential loans or loans from commercial banks, but mainly uses the small initial capital contributions of members... The main assets of cooperatives are works such as pumping stations, irrigation canals, and intra-field bridges. Average charter capital is 960 million VND/cooperative, low charter capital, annual conversion process is not supplemented, most members do not contribute when converting according to the Cooperative Law, the capital is mainly transferred from old-style cooperatives.

Another difficulty and weakness of the current cooperatives that must be mentioned is the production plan. Currently, the number of cooperatives that operate effectively and have a clear production and business plan is very small. Despite being called an agricultural and service cooperative, members of the Na Tong agricultural and service cooperative (Tam Thai, Tuong Duong) only focus on the clean vegetable production model with an area of ​​2 hectares due to the new rural construction program implemented in 2013. When we arrived, some people were taking care of the cabbage beds, a few rows of hot chili peppers had already finished the harvest season, with only a few red chili peppers...

When asked about what people get from joining the cooperative and what their responsibilities are, most people do not understand anything about the cooperative's activities, only knowing that they have to contribute an initial capital of 5 million VND. Mr. Vi Viet Kieu - Vice Chairman of the People's Committee of Tam Thai commune said that Tam Thai is one of the three pilot communes of Tuong Duong implementing the national target program on new rural construction, in 2013 the commune achieved 11/19 criteria. One of the criteria that has not been met is criterion number 13 on the form of production organization. Therefore, to complete the criteria on new rural construction, the commune has established a cooperative. However, up to now, the cooperative's activities are still very rudimentary, confused in finding a production plan...

Tuong Duong mountainous district currently has 6 cooperatives, all of which operate at a low level and have monotonous production. Most households' economies are still facing difficulties, so there has not been a large-scale investment. The awareness of economic development through collective development of the majority of people is still limited, and there is still a mindset of waiting for state investment; cooperative members have not been trained in management skills and production techniques to apply to collective economic development. Infrastructure and transportation in production areas have not been invested in much, which has affected the harvesting and transportation of agricultural products. In addition, post-harvest processing and preservation have not been focused on investment and application in production. The output market for products of cooperative farms is still difficult, especially the lack of connection between production and consumption of goods, which has affected people's investment psychology.

Nghia Hoan farmers buy seeds from the cooperative

Nghia Dan - a locality with great potential for economic development, however, Nghia Dan people are known to have a mindset of doing commodity economy, but in 2014, the total revenue of cooperatives only reached over 5 billion VND, an average of 658.6 million VND/cooperative. Business results in 2014 had 3 cooperatives and credit funds making profits. It can be said that the development of collective economy and cooperative economy in the agricultural sector of the province in recent times has been struggling, the number of cooperatives operating effectively is not much, the number of cooperatives at risk of dissolution due to not determining the right direction of production and business has shown signs of increasing.

In general, the scale of cooperatives and cooperative groups is still small, the management level and capacity of many cooperative officials is still weak, the quality and efficiency of many cooperatives and cooperative groups are low, not ensuring the principles of the Cooperative Law. The growth rate of the cooperative economy is slow, unstable, and lacks strategy. Most cooperatives are not proactive in arranging production and business activities, and the development of service business plans is not realistic. Some depend heavily on the Party Committee and the People's Committee of the commune. Cooperatives do not operate in accordance with the Cooperative Law.

(To be continued)

Thu Huyen