The Current Situation and Solutions to Improve Participation of Cooperatives in the One Commune One Product (OCOP) Program

The Current Situation and Solutions to Improve Participation of Cooperatives in the One Commune One Product (OCOP) Program

Published: 2021.08.11
Accepted: 2021.08.10
12
Center for Agricultural System Research and Development, Institute of Food Crops, Vietnam
Center for Agricultural System Research and Development, Institute of Food Crops, Vietnam
Center for Agricultural System Research and Development, Institute of Food Crops, Vietnam
Vice President
Vietnam Academy of Agriculture Sciences (VAAS).

ABSTRACT

The One Commune One Product program (OCOP Program) contributes to economic restructuring, improves income and quality of life for people and effectively implements the group of criteria "Economy and production organization" in the Ministry, which is a national criteria for new rural communes. This program is built on the basis of experiences from the OVOP movement of Japan, the OTOP program of Thailand and the OCOP program of Quang Ninh province. Subjects participating in the program implementation include small and medium enterprises, cooperatives, collaborative groups, and registered production households. In the OCOP, the cooperative is the subject to be prioritized and its members are encouraged to participate in the Program. However, the assessment of the current status of the participation of cooperatives in Ha Nam, Nghe An and Quang Tri in 2019 shows that, due to many difficulties, the cooperatives and their products have not achieved results when participating in this Program. To increase the participation of the members of  cooperatives, it is necessary to promote advocacy, training, and consultation; support the cooperatives to upgrade and perfect products according to OCOP product standards and instructions; and carry out trade promotion activities to increase the value of OCOP products. Central agencies and localities continue to promulgate specific policies and mechanisms to implement solutions to create valuable products and goods, welcomed by the market, and improve product quality. Turning OCOP products into branded goods requires that quality must always be high  and should ensure safety for its users. This article summarizes some of the results of the current situation of participation and difficulties encountered. It also proposes solutions to increase the participation of cooperatives in the OCOP Program.

Keywords: Cooperatives, one commune one product (OCOP), participation, solution

BACKGROUND

The One Commune One Product program for the period of 2018 - 2020 (hereinafter referred to as OCOP Program) was issued by the Government on the basis of learning from the Japanese One Village One product (OVOP) movement and learning from the the previous experiences of some countries as well as the experiences from the experiment from the first pilot model in Quang Ninh (Government, 2018). This is a program of economic development in rural areas in the direction of developing internal resources and adding value; solutions and tasks in implementing the national target program on new rural construction. The State plays the role of constructing and promulgating the legal and policy framework for implementation; orientations for planning of commodity and service production regions; management and monitoring of product quality standards; supporting stages: training, technical guidance, application of science and technology, branding, trade promotion, product promotion, and credit. The focus of the OCOP Program is to develop agricultural, non-agricultural products and services with advantages in each locality in the value chain, implemented by economic sectors in which the cooperative members identified by the Program as production subjects are prioritized and encouraged to participate. In the context of majority of producers is smallholder, while the OCOP program aims to support small producer to develop the local products and commercialization of these products under the common label OCOP. With the small producer, the market service providing by cooperative is imperative because the invidual household can not do that by themselves. This is the incentive for small producer-farmer to participate in the cooperative. So the marketing capacity of cooperatives became a critical point of a succeful OCOP product process.

The results of OCOP product evaluation and classification in some provinces in 2018 and 2019 showed that many products, goods and services of cooperatives were recognized to meet OCOP product standards from 3 stars up. In addition, many cooperatives have difficulties and limitations when participating in the Program, leading to many advantageous products, goods and services in rural areas that have not been recognized as OCOP products to help improve prestige, quality credit, participating in trade promotion activities and consumer association organized by the central and local levels. Therefore, researching and proposing solutions to increase participation in OCOP for cooperatives will contribute to the implementation of OCOP Vietnam program to achieve the goals, encourage collective economic development, create jobs, and increase income in new rural construction.

OBJECTIVES AND RESEARCH METHODS

Research subjects

The main subjects of this study are cooperatives producing and trading goods and services in rural areas. These are cooperatives with products participating in the OCOP product evaluation and classification in 2019.

Research methods

The study used some of the following methods in collecting documents and information:

  • Methods of collecting secondary documents: collecting summary reports, statistics, policy documents, articles, thematic reports, relevant research reports on experience mobilization, participation of cooperatives in the Program where each village and commune are part of the one product in the world, the participation of cooperatives, the need to participate, and the difficulties and limitations of cooperatives participating in the OCOP Vietnam Program.
  • Method of collecting primary information: through direct interviews with professional officials at the provincial and district levels, representatives of cooperatives participating in the OCOP program in Ha Nam, Nghe An, and Quang Tri provinces: 3 representatives of the Sub-Department Rural Development; 15 representatives from the Departments (Agriculture and Rural Development, Economy); and 10 cooperatives participated in the OCOP program in 2019. The main information collected is the proportion of the program participants who are cooperatives compared to other subjects, the rate of the number of products of cooperatives recognized to reach product standards of OCOP, reasons for not meeting standards, and difficulties and limitations when participating in the OCOP Program.
  • Information synthesis method: after collecting information, information is processed and synthesized with many tools such as tables, diagrams, graphs for information analysis.
  • Information analysis method: based on the evaluation opinion of local state management agencies, leaders of cooperatives, disaggregated information, descriptive statistical analysis and comparison to indicate the current status, and the reasons hindering to propose solutions to promote cooperatives to participate in the OCOP Program.

RESULTS AND DISCUSSION

Experience in improving efficiency of participating in one product one village program of cooperatives in Thailand

Since 2001, Thailand has started to implement the movement "One Tambon One Product" (OTOP) to develop products in association with the Government's poverty reduction target program. The OTOP program aims to make the local community stronger, the community helps each other and will also create jobs, increase income by using local resources and local initiatives to generate developing services, products with good quality for meeting the requirements of the markets both at home and abroad, and creating a network of stores selling OTOP products such as distribution centers, product stores, etc.

In 2012, 36,092 producers (11,204 households, 24,327 groups of households and 561 enterprises, cooperatives) created 71,739 products in the fields registered to participate in the OTOP program. In which, food account for 18,400, beverages 2,465, fabrics and apparel 17,196, furniture, decoration and souvenir 25,813 and herbal products 7,865. The selling value of OTOP products has also increased over the years. In 2001, the sales value of OTOP products reached US$8 million, in 2008 it reached US$2,590 million, positively contributing to gross domestic revenue in rural areas (Anh Tuan, 2012).

Thus, it can be seen that, over 18 years of operation of Thailand's OTOP program, there has been basically some levels of success. The participation of the local communities in product development has created products of increasing quality to meet domestic and foreign demand. Commitments and supports of the Government of Thailand through policies are budget support, knowledge, management and technology support for the community. The participation of organizations and enterprises in supporting the trade promotion of OTOP products creates added value for the products.

The successful results of the OTOP program have a significant contribution from the cooperatives to the program. Agricultural cooperatives in Thailand have three main roles in the process of participating in the OTOP program: the assistance of cooperative representatives in helping the government build professional groups to produce OTOP-compliant products; development and and improvement of products to meet OTOP standards; and support searching for markets consuming OTOP products.

Helping to build career groups to manufacture OTOP-compliant products, agricultural cooperatives in Thailand provide assistance to form professional groups consisting of the members of the cooperatives and the members' spouses to create more jobs for the households. Professional groups receive training to produce products and services that meet OTOP standards to increase income and quality of life. There are currently about 2,000 professional groups in the cooperative sector participating in the OTOP program and producing a variety of products to sell to the market.

Developing and improving products of cooperatives and professional groups to meet OTOP standards: The characteristics of cooperatives in Thailand are dynamic. They always explore and improve existing products and services to meet increasing and ever-changing requirements of the market. Therefore, the products participating in the OTOP program of the cooperative or the professional groups in the cooperative always ensure quality and characteristics are preferred by consumers.

Supporting search for markets, consuming OTOP products: The biggest success of the cooperatives in Thailand is assisting its members in consuming products. To be able to sell all products of cooperative members in Thailand, there are many different activities such as participating in exhibition fairs, advertising products on the internet, developing a network of sales centers, and investing in construction of processing zones to create the final product.

The status of the cooperative participation in the OCOP program in the period of 2018 – 2020

In the National Criteria for a new countryside, in order to be recognized as a new rural commune, the commune needs to meet 19 criteria, of which criterion 13 states "Have a cooperative or cooperative working effectively" (Government, 2009). This criterion is revised to “Communes with cooperatives operating in accordance with the 2012 Law on Cooperatives” (Government, 2016). For a new model rural commune, which has met the newly improved rural standards, there are at least two new-type of cooperatives that are effectively cooperating to do business (Government, 2018).

By the end of September 2018, the whole country had more than 21,506 cooperatives in operation with more than 6.6 million members and 2.4 million regular employees. The total charter capital of the cooperatives is more than USD1,509,000 and the total assets is more than USD3,578,000. In 2012, the proportion of the cooperative system contributing to Vietnam's GDP was 12%, by 2018 it was only about 7%, quite low compared to the world average of 15% to 30% (Vietnam Cooperative Union, 2018). In the agricultural sector, by the end of 2018, the whole country had 13,856 cooperatives. In the period 2003-2018, the number of agricultural cooperatives increased to 5,769 (newly established 9,391 cooperatives, dissolved 3,643 cooperatives, and 21 cooperatives changed from non-agricultural). The majority of cooperatives operate in general (49.47%). The rest are the cooperatives operating in specialized fields with the largest number of cultivation, followed by livestock and fisheries and the lowest is salt production (Vietnam Cooperative Union, 2018).

Participating in the OCOP Program, cooperatives are given priority over other production entities (households, cooperative groups, limited liability companies and joint stock companies). In the grading criteria for the type of organization of production and business, if the producer is a cooperative, this criterion will score 1-2 points higher than the score for other production subjects (Government, 2019).

Despite being a priority target, the proportion of cooperatives participating in the OCOP Program in 2019 in Ha Nam, Nghe An and Quang Tri is lower than those for other producers. Out of 11 producers with products recognized to meet OCOP standards of Ha Nam province in 2019, there is only 1 cooperative, accounting for 9.09% of the total participating producers. In the two provinces of Nghe An and Quang Tri, the percentage of producers who are cooperatives is higher than that of Ha Nam, but still much lower than producers who are companies and enterprises.

As a rule, one entity can register more than one product per year to participate in the OCOP Program. On average, the number of products participating in the OCOP Program in 2019 of each company and enterprise is much higher than the number of cooperatives. In Ha Nam, there is 1 cooperative participating in the Program with 2 products recognized as OCOP products, but with only 3 companies and enterprises participating, 8 products have been recognized as meeting OCOP product standards. Similarly in Nghe An, the number of participating cooperatives and the number of products recognized meeting OCOP standards are 10 cooperatives and 12 products, while for the group of entities being companies and enterprises, these figures are respectively 14 companies, enterprises and 26 OCOP products.

OCOP products will be evaluated through assessment, classified by 3 levels (district, provincial, national) to grade, from 1 to 5 stars (equivalent from 0 to 100 points). In which, 3-5 star products at district level will continue to be assessed at the provincial level, 5 star products at the provincial level will continue to be assessed at the national level. Provincial People's Committee is the authority that recognizes products that meet OCOP standards of 4 stars or less. This means that the 4-star OCOP product is the highest product grade at the provincial level.

Compared with products of companies and enterprises, the ratio of 4-star OCOP products of cooperatives in Ha Nam and Nghe An is also lower. The rate of 4-star OCOP products of cooperatives, and companies and enterprises in Ha Nam respectively is 11.11% and 22.22% of the total number of products recognized as meeting OCOP standards in 2019. This rate in Nghe An is much larger, the ratio of 4-star OCOP products of cooperatives is only 4.17%, while that of companies and enterprises accounts for 25.00% of total OCOP products.

From the above analysis, it shows that the cooperatives have difficulty participating in the OCOP program, leading to the low rate of OCOP products of the cooperative meeting 4-star standard according to the scoring criteria.

Some difficulties and limitations of cooperatives participating in the OCOP program

In addition to the general difficulties in management capacity, operating organization, and building and implementing business plans, when participating in the OCOP program, cooperatives face some main difficulties as follows:

  • This is a new program, so there are no instructions for implementation and full participation. The cooperatives lack information, and they do not understand the objectives, meaning, content, benefits, and steps of participation in the program. They volunteer to participate or are not willing to participate in upgrading and perfecting products to evaluate and classify products at all levels.
  • The cooperatives have not been able to perfect and immediately upgrade their products to participate in the evaluation and upgrading of OCOP products at all levels. The reason is that the cooperative's products still lack many criteria in the set of criteria for product evaluation and ranking. This requires funding to upgrade products to meet the criteria (processing a variety of categories, using packaging, labeling, traceability, analysis and testing to publish and control quality, etc.) large, exceeding the mobilized resources and investment capacity of the cooperatives.
  • It is required to have a certificate of eligibility for production for the latest group of herbal products, health foods or new products that are difficult to meet. According to the provisions of Decree No. 15/2018/ND-CP dated February 2, 2018, health care food manufacturers must meet the requirements of food hygiene and safety in accordance with GMP standards. To get GMP certification, production and business establishments are required to have complete human records (with relevant qualifications), appropriate processing equipment, extraction, and layout of suitable houses to be submitted to the Ministry of Health for evaluation and licensing. The investment of funds to meet these regulations is very great. Therefore, this is a regulation that makes it difficult for cooperatives that have a long production tradition but are small in scale with little capital. In fact, these are traditional products with advantages of a number of localities (Nghe An, Quang Tri) with many production entities engaged in production and business.
  • Requirement for certification of environmental protection is not specific, suitable for each product / product group. Depending on the scale of production, the degree of environmental impact, the producers participating in the OCOP program need to develop an environmental impact assessment report, an environmental protection project, and an environmental protection plan. In fact, most cooperatives stop at applying some environmental protection solutions (biogas, microbiological composting, wastewater collection) but have not yet developed an environmental protection project, and/or an environmental protection plan.
  • One of the biggest difficulties that cooperatives are facing is trade promotion for their products. Due to lack of knowledge, skills and funding, it is difficult for cooperatives to pay attention to trademark registration, design the advertising identification system to serve as a tool for product trade promotion. On the other hand, some trade promotion activities are still in the traditional way as before, which is bringing products to trade fairs. Therefore, the achieved efficiency is not high, and not meeting the needs of production subjects. In the future, it is necessary to diversify forms of advertising, trade promotion, increase advertising on television and social networks; promote activities to link and organize a network of points of introduction, synchronous distribution of OCOP products in association with tourist spots, shopping malls, stations, and docks; organizing OCOP product supply-demand conference between production entities with supermarkets and distributors; building advertising websites, distributing general OCOP products at provincial and national level, promoting commercial activities of OCOP products on electronic trading floors.

Some solutions to increase the participation of cooperatives in the OCOP program

To increase the participation of cooperatives in the OCOP Program, we propose the following solutions:

  • Promote communication, use different communication channels to propagate for producers and cooperatives to understand the objectives, content, role of the OCOP Program and voluntarily register to participate.
  • Train the leaders of cooperatives to build and execute business plan, product quality management, marketing skills, trade promotion and production link building, product consumption.
  • Train and build capacity for cooperatives to apply technical process of production, preliminary processing and processing; advanced quality management process; and recording production and consumption information which helps to build a traceability system.
  • Consult and guide production subjects in general and cooperatives in particular to complete the procedures for certifying production establishments, building and announcing product quality.
  • Consult and support cooperatives to upgrade and perfect products through policies, programs, themes, projects (new countryside, poverty reduction, association, production support, industrial promotion) is being carried out in the provinces. Intervention activities should focus on supporting cooperatives to:
  • Strengthen preliminary processing, processing, classifying, creating added value for the product; Design and test using product identification system: Logo, flyer, standee, signboard, billboard, display booth design, packaging, label, access stamp.
  • Guide and support cooperatives to implement trade promotion activities through: Organization of customer conferences; Organizing or participating in the annual OCOP product fair and exhibition; Advertising on various mass media; Building a point to introduce and sell OCOP products; Building a website to promote and introduce the cooperative and OCOP products of the cooperative; Building a channel to promote and introduce the cooperative's OCOP products on social networking sites (Facebook, Youtube, etc.); Introducing OCOP products of cooperatives on online sales channels, electronic trading floors such as: shopee.vn, sendo.vn, gcaeco.vn, etc.

CONCLUSION

The OCOP program is a meaningful program for countryside development because it helps to develop business organizations, with the core of cooperatives, small and medium enterprises closely linked to agricultural restructuring, developing craft villages, producing traditional products based on local resources, identity and creativity in order to increase domestic value and competitiveness as well as participate in export value chains for export products in rural Vietnam.

Although it is a priority target, the cooperatives have difficulty participating in the Program. The reason is that the resources of cooperatives (capacity to organize operations and management, equipment, machinery, capital) are limited to lead to the upgrade and completion of products according to the scoring criteria, and not able to meet the requirements of the evaluation for being recognized as an OCOP product. Therefore, the criteria for building and announcing quality standards, creating added value, promoting product trade, protecting the environment in production are low, and the rate of products being recognized as 4 Star OCOP products is also low.

To help cooperatives solve the above difficulties, a number of solutions that need to be implemented are: Strengthening advocacy; Training; Consulting and supporting cooperatives to upgrade and complete their products according to OCOP product standards; and Guiding and supporting cooperatives to implement trade promotion activities to improve the value of OCOP products.

RECOMMENDATION

Participating in the OCOP program is a good opportunity for cooperatives to improve product quality, increase competitiveness, expand markets, contribute to restructuring the rural economy, complete the value chain from production to processing and selling of products, and increase the income for cooperative members.

However, for the cooperatives participating in the OCOP program to be effective, it is necessary to have specific mechanisms and policies from the central to local levels to implement solutions to create valuable products and goods. There is a need for the central and local governments to help the cooperatives improve the quality of their OCOP products, turn OCOP products into branded goods, and ensure the safety for users. Besides, localities also need to strengthen and have a mechanism to support cooperatives to improve packaging, traceability stamps, promote products, participate in trade promotion fairs inside and outside the province, create favorable conditions for consumption of products. Besides, based on the registration of the cooperatives, it is necessary to orient the development in order to upgrade products with OCOP certification at provincial level to higher level.

REFERENCES

Anh Tuan, 2012. Thailand develops collective economic efficiency. Industry magazine, August 1, 2012.

Government, 2009. Decision No. 491 / QD-TTg dated April 16, 2009 Promulgating the National Criteria for New Rural Areas.

Government, 2016. Decision No. 1980 / QD-TTg dated October 17, 2016 Promulgating the national set of criteria for new rural communes for the period of 2016 - 2020.

Government, 2018. Decision No. 490 / QD-TTg dated May 7, 2018 approving the Program of one product per commune for the period of 2018 - 2020, access date June 2, 2020, Retrieved from https://thuvienphapluat.vn/van-ban/Thuong-mai/Quyet-dinh-490-QD-TTg-2018-phe-duyet-Chuong-trinh-moi-xa-mot-san-pham-381164.aspx

Government, 2018, Decision No. 691 / QD-TTg dated June 5, 2018 Promulgating the criteria for model new rural communes in the period of 2018 - 2020.

Government, 2019. Decision No. 1048 / QD-TTg dated August 21, 2019 promulgating a set of criteria for evaluating and classifying the program's products for each commune, one product, access date June 3, 2020. Retrieved from https://luatvietnam.vn/thuong-mai/quyet-dinh-1048-qd-ttg-2019-bo-tieu-chi-danh-gia-phan-hang-san-pham-176287-d1.html

Vietnam Cooperative Union, 2018. Report of the 9th Conference of the Standing Committee of Vietnam Cooperative Union, term V.

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