Forming value chains and developing sustainable cooperatives

In the current context of international economic integration, building production models based on value chains not only enhances economic efficiency but also helps farmers change production methods, control product origins, and increase product value.

Effective models

Yen Bai is among the early localities to establish agricultural value chains. The province has successfully developed seven concentrated production zones, including: 90,000 hectares of timber plantations; 81,000 hectares of cinnamon; 12,000 hectares of son tra (docynia indica); 25,000 hectares of various fruit trees; 6,000 hectares of Bat Do bamboo shoots; and over 3,000 hectares of various medicinal plants. These provide stable raw materials for more than 30 enterprises and over 600 cooperatives engaged in processing and marketing agricultural products across the province.

A visit to the Vietnam Cinnamon and Star Anise Cooperative in Dao Thinh Commune, Tran Yen District, revealed the added value generated through value chain linkages, highlighting the bold direction and commitment of the cooperative’s leadership. Capitalising on the favourable climate and soil conditions for medicinal plants, the cooperative encouraged locals to grow cinnamon to organic standards, committing to purchase the entire output at prices 6% to 10% higher than market rates. The cooperative currently employs about 50–60 seasonal workers, with an average monthly income of around 6 million VND.

According to cooperative director Nguyen Ba Mao, thanks to a stable supply of raw materials, the unit has established an organic cinnamon processing factory spanning over 14,000 square metres, with a processing capacity of 80–100 tonnes of fresh cinnamon per month. Its products are exported to India, the Middle East, the US, the EU, and Japan. Through this value chain linkage, the cooperative ensures strict quality control of input materials and diversifies its product range to boost exports.

The Tu Xa Safe Vegetables Cooperative in Lam Thao District, Phu Tho Province, is another successful model that sees value chain linkages as the key to sustainable development. Established nearly a decade ago, the cooperative now has more than 50 members and over 50 affiliated households producing vegetables according to VietGAP standards. Partnering with the cooperative, farmers receive technical guidance on cultivation, care, and harvesting processes, reducing risks related to pests and diseases.

The vegetables are sold under stable contractual arrangements to schools, businesses, supermarkets, and convenience stores. Cooperative director Nguyen Van Nghia noted that value chain linkages have transformed farmers’ production mindset from traditional to modern practices, thereby enhancing the value of their agricultural produce.

Diverse forms of linkage

To promote the establishment of value chain production models, local authorities have stepped up communication efforts and introduced policies to support farmers; cooperatives have carried out land consolidation and accumulation, while also promoting trade and introducing key local agricultural products and OCOP (One Commune One Product) items to domestic and export markets.

Yen Bai Province has supported 21 value chain linkage projects, such as livestock support for over 100 facilities with a total investment of over 24 billion VND, and the sustainable planting and care of 1,425 hectares of forest (valued at over 60 billion VND). In Phu Tho, in 2024 alone, the provincial budget funded eight value chain production projects with a total investment of 42.6 billion VND. As a result, products developed and marketed through such linkages now contribute approximately 5.5% of the province’s total agricultural production value.

Deputy Director of the Vietnam Academy of Agricultural Sciences, Dao The Anh, affirmed that establishing value chains with cooperatives serving as connectors in agriculture is an inevitable market trend. It enables farmers, cooperatives, and businesses to efficiently tap into internal resources, improve product quality, and enhance competitiveness within global supply chains. To ensure the sustainability of value chain linkages, it is necessary to promote financial support for cooperatives, even smaller-scale ones, provided that they have clear operational plans.

The development of the collective economy and cooperatives is considered a crucial foundation for advancing local social welfare policies. The active engagement of the local political system has helped cooperatives play an effective role in uniting and supporting farmers in shifting towards sustainable agricultural practices. This includes gradually applying scientific and technological advances, increasing production efficiency, and improving incomes. Le Duc Thinh, Director of the Department of Cooperative Economy and Rural Development, stated that many programmes and projects have been effectively implemented, making cooperatives a trusted channel for delivering state and government support policies to farmers. Many economists emphasise that for national target programmes to be implemented practically, effectively, and sustainably, it is essential to further promote the linkage role of collective economic organisations and cooperatives.

Thinh also stressed that the emergence of cooperatives has made state investment programmes more effective in restructuring the agricultural sector. Cooperatives are increasingly seen as playing a crucial role in connecting and supporting nearly 10 million farming households in Viet Nam to engage more deeply and contribute significantly to the green transformation of agriculture. This is also one of the key orientations set out by the Government at the 2025 National Cooperative Forum.

Building value chain linkages is proving to be a superior approach to rural economic development. Given what the agricultural sector has achieved through these linkages, it is now essential to diversify sectors and industries involved, allowing state management agencies to make market demand forecasts. This helps mitigate risks for producers, distributors, and businesses in the face of domestic and international market volatility.

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