ABSTRACT
This paper analyzes Vietnam's approach to developing standardized agricultural and forestry raw material production areas by synthesizing policy documents, government agency reports, and relevant studies. The findings indicate that Standardized Raw Material Production Areas are designed not only to expand production scale but also to establish an integrated system encompassing production, processing, and marketing in compliance with requirements for product quality, food safety, traceability, environmental sustainability, social responsibility, infrastructure, and production support services. The model is based on several key approaches, including public–private partnerships, comprehensive and inclusive development, market- and supply chain-oriented development, cooperative-centered organization, and the recognition of raw material production areas as ecosystems for innovation and sustainable development. The positive outcomes achieved during the 2022–2025 period provide a foundation for scaling up the model and restructuring Vietnam's agricultural production toward a more modern, competitive, green, and sustainable agricultural sector.
Keywords: Standardized raw material production areas, public–private cooperation, agricultural cooperatives, value chain linkage, sustainable agriculture.
INTRODUCTION
As international economic integration deepens, Vietnamese agricultural products face increasing competition not only on production costs but also on product quality, supply reliability, and compliance with stricter international market requirements. High-value markets such as the European Union (EU), the United States, Japan, and many others have shifted from focusing primarily on product quality to requiring comprehensive compliance with food safety, traceability, environmental protection, greenhouse gas emission reduction, social responsibility, sustainable labor practices, and transparency throughout the value chain. Meanwhile, Vietnamese agriculture remains predominantly small-scale and fragmented, making it difficult to standardize production practices and ensure consistent product quality, thereby limiting compliance with international standards.
Although Vietnam has promoted agricultural value chain linkages for many years, they remain insufficiently sustainable. The proportion of agricultural products marketed through formal value chain arrangements is still relatively low. Many contractual partnerships remain unstable, and collaboration among enterprises, cooperatives, and farming households is often weak. Furthermore, many production areas have yet to establish large-scale production capable of delivering consistent product quality. Another key requirement is to identify an effective, sustainable model of agricultural production organization suited to Vietnam’s conditions and capable of transforming the agricultural sector’s growth model.
These challenges have created an urgent need to establish concentrated, Standardized Raw Material Production Area models supported by a unified management system to enhance the competitiveness of Vietnamese agricultural products in both domestic and international markets. In response, Vietnam launched the Pilot Program on the Development of Standardized Agricultural and Forestry Raw Material Production Areas for Domestic Consumption and Export, 2022–2025 (hereinafter referred to as the Pilot Program) under Decision No. 1088/QĐ-BNN-KTHT, issued in 2022 by the Minister of Agriculture and Rural Development (now the Ministry of Agriculture and Environment). The Pilot Program has achieved encouraging results, providing a foundation to scale up the standardized raw material production zone model nationwide from late 2026 onward.
This paper presents Vietnam's approach to developing standardized agricultural raw material production areas. The analysis is based on a review of secondary sources, including Decision No. 1088/QĐ-BNN-KTHT, reports issued by the Ministry of Agriculture and Environment, reports from provincial authorities, and relevant research studies.
OVERVIEW OF THE PILOT PROGRAM
The Pilot Program was implemented during the 2022–2025 period in 13 provinces, namely Hoa Binh, Sơn La (Northern Mountainous Region), Quang Trị, Thua Thien Hue (North Central and Central Coastal Region), Gia Lai, Đak Lak, Đak Nong, Kon Tum (Central Highlands), Đong Thap, Long An, Tien Giang, Kien Giang, and An Giang[1] (Mekong Delta). Its primary objective was to pilot the development of five Standardized Raw Material Production Areas across these provinces, generate practical lessons, and subsequently scale up the model nationwide (Ministry of Agriculture and Rural Development, 2022).
The Pilot Program aimed to:
- Establish five large-scale Standardized Raw Material Production Areas covering a total area of approximately 166,800 ha, including: (i) a 14,000-ha fruit production zone in the Northern Mountainous Region; (ii) a 22,900-ha sustainably certified planted forest timber zone (FSC, PEFC, VFCS, etc.) in the North Central and Central Coastal Region; (iii) a 19,700-ha coffee production zone in the Central Highlands; (iv) a 50,000-ha rice production zone in the Mekong Delta; and (v) a 60,200-ha fruit production zone in the Mekong Delta.
- Promote value chain linkages among enterprises, cooperatives, and farmers; strengthen agricultural cooperatives; and enhance farmers' capacities.
- Promote the application of science and technology, including production area codes and traceability systems within Raw Material Production Areas.
- Reduce production costs and post-harvest losses while increasing producers' profitability.
- To achieve these objectives, the Pilot Program was organized into four major component projects:
Project 1: Investment in Regional Infrastructure to Support Cooperative-Based Raw Material Production Areas. This component included investments in rural roads connecting production areas and linking raw material zones with processing facilities; irrigation systems; cold storage facilities; collection and pre-processing centers; silos; and preservation and processing facilities; as well as infrastructure and equipment for cooperatives, such as pre-processing facilities, cold storage, irrigation systems, drying and processing facilities, warehouses, storage tanks, greenhouses, and machinery.
Project 2: Production Organization and Management of Raw Material Production Areas. This component focused on establishing and strengthening agricultural cooperatives through training, capacity building, agricultural extension, technology transfer, and digital management systems.
Project 3: Development of Community-Based Agricultural Extension and Communication. This component included establishing community-based agricultural extension models to support sustainable Raw Material Production Areas, strengthening grassroots extension services by expanding community extension groups, and implementing communication activities to promote the development of Standardized Raw Material Production Areas.
Project 4: Development of Agricultural Value Chain Linkages. This component included piloting value chain financing mechanisms; implementing agricultural insurance schemes in Raw Material Production Areas; promoting value chain linkages under Decree No. 98/2018/ND-CP; supporting sustainable management of rice-growing land; encouraging the adoption of Good Agricultural Practices (GAP) under Decision No. 01/2012/QĐ-TTg; and implementing and scaling up integrated agricultural mechanization models.
Funding for the Pilot Program was mobilized from multiple sources, including the central and local government budgets, counterpart contributions from enterprises and cooperatives, and commercial credit.
APPROACHES TO DEVELOPING STANDARDIZED RAW MATERIAL PRODUCTION AREAS
The standardized raw material production zone model is built upon a set of approaches that differ substantially from those adopted in previous production area development programs. While earlier initiatives primarily focused on expanding cultivated areas or investing in infrastructure, the Pilot Program adopts a broader perspective by treating Raw Material Production Areas as integrated ecosystems encompassing production, processing, and marketing. This approach combines multiple policy instruments, engages diverse stakeholders, and pursues multiple development objectives simultaneously. The principal approaches are summarized below.
Public–private cooperation approach
One of the Pilot Program's most significant innovations is adopting a public–private cooperation (PPC) approach to developing Standardized Raw Material Production Areas. Under this approach, the government does not directly organize agricultural production; instead, it creates an enabling environment through institutional development and investments in public goods and services. Enterprises, cooperatives, and farmers handle investment, production organization, and market development.
Within this model, the government concentrates on investments that are difficult or insufficiently attractive for the private sector, including transport infrastructure, irrigation systems, shared logistics facilities, human resource development, community-based agricultural extension services, technology transfer, agricultural data management systems, traceability systems, agricultural credit, and crop insurance. In contrast, enterprises invest in processing, storage, marketing, and market linkages; cooperatives organize production and provide production support services; and farmers contribute land, labor, and compliance with prescribed production standards. This mechanism mobilizes resources from multiple sectors rather than relying predominantly on public funding.
Implementation results indicate that counterpart contributions from enterprises, cooperatives, and farmers accounted for more than 70% of the total investment in the Pilot Program. These results show that public funding served as seed capital, leveraging substantial private investment in developing Standardized Raw Material Production Areas. More importantly, the PPC approach goes beyond financial mobilization by clearly allocating responsibilities according to each stakeholder's comparative advantages, thereby improving investment efficiency and the long-term sustainability of the production zones.
Standards-based approach
A fundamental distinction between the Pilot Program and previous production area development programs is that it aims not merely to establish large-scale production areas but to develop Standardized Raw Material Production Areas. In the Pilot Program, the concept of "standardized" is interpreted comprehensively, encompassing multiple dimensions of standards.
First, product quality standards are achieved through the adoption of good agricultural practices and internationally recognized certification schemes, such as VietGAP, GlobalGAP, the Sustainable Rice Platform (SRP) Standard, FSC, 4C, or other equivalent standards appropriate to specific commodities and target markets.
Second, food safety is ensured through production area codes, production records, databases, and electronic traceability systems.
Third, environmental standards emphasize ecological production, efficient resource use, reduced greenhouse gas emissions, circular agriculture, waste management, and biodiversity conservation. These requirements have become increasingly important as international markets place greater emphasis on green growth and low-carbon production.
Fourth, social responsibility standards focus on organizing production through agricultural cooperatives, strengthening farmers' participation, safeguarding smallholder producers' interests, enhancing community capacity, promoting equitable access to services, and ensuring compliance with labor regulations.
Fifth, standards for infrastructure and production organization include the development of transportation networks, irrigation systems, storage and pre-processing facilities, logistics services, agricultural mechanization, quality management systems, and the capacity of cooperatives and farming households, together with the development of value chain linkages that support modern, mechanized, and technology-based agricultural production.
Accordingly, the standards-based approach evaluates not only the final agricultural products but also the entire production system that generates them.
Comprehensive and inclusive development approach
A distinguishing feature of the Pilot Program is its comprehensive development approach, under which Standardized Raw Material Production Areas are developed across the entire value chain rather than a single production stage.
Accordingly, developing Raw Material Production Areas extends beyond infrastructure investment to include the simultaneous implementation of production reorganization, cooperative development, science and technology transfer, community-based agricultural extension, digital transformation, logistics development, agricultural credit and insurance, and the promotion of value chain linkages. The four project components of the Pilot Program collectively reflect this integrated approach.
The inclusive nature of the Pilot Program is demonstrated by ensuring that all stakeholder groups participate in and benefit from the development of Standardized Raw Material Production Areas. Farmers benefit from enhanced technical capacity, higher incomes, and reduced production risks. Cooperatives strengthen governance capacity and expand services for members. Enterprises gain access to stable and reliable sources of raw materials. Local governments improve governance effectiveness while promoting sustainable agricultural development. Financial institutions, insurance providers, agricultural extension organizations, and technical service providers also participate by delivering essential support services. At the same time, the Pilot Program seeks to balance the interests of all stakeholders rather than maximizing the benefits of any single group. This balanced distribution of benefits is a critical prerequisite for sustaining long-term collaboration within agricultural value chains.
Market-oriented and linked supply chain development approach
Unlike previous production development models, which were primarily supply-driven, the Pilot Program adopts a market-oriented approach, whereby market demand and enterprise requirements serve as the starting point for developing Standardized Raw Material Production Areas. Under this approach, enterprises and target markets determine commodity selection, production zone scale, production protocols, and infrastructure investments.
Within this framework, enterprises play roles beyond product procurement. They participate from the outset by defining raw material quality standards, providing technical guidance, entering into procurement contracts, and investing in pre-processing and processing facilities. Agricultural cooperatives serve as the organizational hub for coordinating production in line with enterprise requirements, while farmers implement production practices jointly agreed upon by enterprises and cooperatives (Hoang and Pham, 2026). As a result, both the number of value chain partnerships and the number of enterprises participating in Standardized Raw Material Production Areas increased substantially during the Pilot Program.
Cooperative-centered approach to organizing raw material production areas
A central principle of the Pilot Program is to position agricultural cooperatives as the core organizational units of Standardized Raw Material Production Areas. Because agricultural production in Vietnam remains predominantly smallholder-based, enterprises cannot contract with and manage thousands of individual farming households directly. Agricultural cooperatives are therefore designated as intermediary organizations responsible for mobilizing farmers, coordinating production, providing production support services, managing product quality, and representing farmers in contractual arrangements with enterprises.
Strengthening the development and role of agricultural cooperatives is one of the core objectives of the Pilot Program. Cooperatives implement most support activities, including infrastructure investment, capacity building, technology transfer, information technology application, access to credit, and logistics development.
Implementation results show that more than 390 agricultural cooperatives participated in the Standardized Raw Material Production Areas. Many of these cooperatives have gradually evolved from providers of input supply services into organizations that coordinate value chains and represent farmers in business partnerships with enterprises. Consequently, Standardized Raw Material Production Areas are built not on direct contractual relationships between enterprises and individual farmers, but on a three-tier organizational structure comprising enterprises, cooperatives, and cooperative members, with agricultural cooperatives serving as the central coordinating institution.
Developing standardized raw material production areas as an innovation and sustainability ecosystem
Beyond the approaches discussed above, the Pilot Program conceptualizes Standardized Raw Material Production Areas as ecosystems for innovation and sustainable development, in which infrastructure, science and technology, digital transformation, community-based agricultural extension, logistics, agricultural credit, insurance, and data governance are developed in an integrated manner to support production organization.
A notable feature of this approach is that digital transformation and logistics are not treated as standalone objectives but as enabling instruments for improving governance in Raw Material Production Areas. Digital platforms, traceability systems, production databases, and logistics infrastructure reduce transaction costs, improve transparency, and strengthen governance. At the same time, the Pilot Program integrates environmental protection, climate change adaptation, greenhouse gas emission reduction, and ecological agriculture into the development of Standardized Raw Material Production Areas.
This approach demonstrates that Standardized Raw Material Production Areas are conceived not merely as agricultural production areas but as integrated economic, technological, social, and environmental ecosystems. Through the coordinated development of these interconnected components, the model provides a foundation for a modern, efficient, sustainable, and competitive agricultural sector.
OUTCOMES OF THE DEVELOPMENT OF STANDARDIZED RAW MATERIAL PRODUCTION AREAS
After four years of implementation, the Pilot Program has achieved encouraging results. The total area of Standardized Raw Material Production Areas increased by 20% compared with the pre-project period. More than 123 new agricultural cooperatives were established, and thousands of cooperative managers and members received training to strengthen their capacities, including using accounting software and product traceability systems (National Agricultural Extension Center, 2025; Department of Cooperatives and Rural Development, 2025). Overall, the Pilot Program has generated several significant outcomes.
Transformation of the functions and organizational model of Raw Material Production Areas. Integrated infrastructure investment has restructured the entire value chain, fundamentally transforming the roles of cooperatives, enterprises, and Raw Material Production Areas. Agricultural cooperatives have evolved from being production units into value chain coordination and integration hubs. Enterprises have shifted from primarily purchasing commodities to leading processing, marketing, and exporting agricultural products. Raw Material Production Areas have shifted from isolated production areas to core value chain hubs that integrate production, logistics, processing, and marketing. As a result, these zones now serve not only as production areas but also as platforms for modern agricultural value chains that connect public investment, leverage private investment, enhance rural livelihoods, and promote green, sustainable, and scalable agricultural development.
Reduced production and logistics costs. Infrastructure investments reduced production and logistics costs by about 20–30% while also shortening transportation time for agricultural products.
Lower post-harvest losses and improved product quality. Investments in storage facilities, drying yards, and pre-processing centers reduced post-harvest losses from 10–12% to 7–9%, for example in fruit and coffee production (Department of Cooperatives and Rural Development, 2025). This improvement is particularly important for highly perishable products such as tropical fruits, contributing to higher market value and longer storage life.
Higher productivity, increased incomes, and more stable employment. Average household income increased by 5–10%. Particularly, rice farmers in An Giang and Kien Giang provinces increased their income by 10-12% (Department of Cooperatives and Rural Development, 2025). The Pilot Program also created thousands of new jobs, particularly in operating irrigation pumping stations, pre-processing facilities, and agricultural mechanization services.
The program strengthened agricultural cooperatives and value chain linkages. The proportion of agricultural products marketed through cooperatives increased substantially from 35% to 57%. Approximately 71.2% of the standardized raw material production area became linked to enterprises through marketing agreements, compared with only 12.5% before the Pilot Program. The number of participating enterprises and processing plants increased from 11 at the beginning of the Project to 27.
Enhanced the effectiveness of public investment and promoted public–private cooperation (PPC). On average, each unit of investment from the central government budget leveraged 5.8 units of funding from other sources. This demonstrates the effectiveness of public investment as seed capital, stimulating private investment in infrastructure that supports partnerships among cooperatives, enterprises, and farmers.
CONCLUSION
The development of Standardized Raw Material Production Areas represents a new approach that is well aligned with Vietnam's transition toward a modern, efficient, sustainable, inclusive, and market-oriented agricultural sector. The distinctive feature of this model lies not merely in establishing large-scale production areas, but in integrating the entire production–processing–marketing system in line with standards for product quality, food safety, traceability, environmental sustainability, social responsibility, infrastructure, and production organization. The model also combines a public–private partnership approach, with agricultural cooperatives serving as the core production organizations, enterprises acting as market leaders, and the government playing an enabling role through infrastructure investment, the provision of public services, and improved institutional support mechanisms.
The results of the 2022–2025 pilot phase demonstrate that the model has generated significant improvements in production organization, cooperative capacity, value chain linkages, and investment effectiveness. The area of Standardized Raw Material Production Areas, the proportion of agricultural products marketed through cooperatives, and the area under enterprise-linked production all increased substantially. At the same time, production costs, logistics costs, and postharvest losses declined, while farmers' incomes improved. Notably, public investment effectively functioned as seed capital, leveraging substantial financial contributions from enterprises, cooperatives, and farmers.
These outcomes confirm that Standardized Raw Material Production Areas can serve as a strategic platform for restructuring agricultural production, enhancing competitiveness, and meeting increasingly stringent market requirements. They also provide a solid foundation for expanding the model nationwide from 2026 onward and for developing a national framework of standards, along with a comprehensive policy system, to support the development of Standardized Raw Material Production Areas.
REFERENCES
Department of Cooperatives and Rural Development (2025). Final evaluation report on the Pilot Program on the Development of Standardized Agricultural and Forestry Raw Material Production Areas for Domestic Consumption and Export, 2022–2025 under Decision No. 1088/QĐ-BNN-KTHT. Hanoi, Vietnam.
Hoang, V. Q., & Pham, Q. T. (2026). Comprehensive evaluation report on the Pilot Program on Standardized Raw Material Production Areas and related policies, with proposed criteria and policy recommendations to promote the development of Standardized Raw Material Production Areas linked to agricultural value chains under Decree No. 98/2018/ND-CP. Hanoi, Vietnam.
Ministry of Agriculture and Rural Development (2022). Decision No. 1088/QĐ-BNN-KTHT dated 25 March 2022 approving the Pilot Program on the Development of Standardized Agricultural and Forestry Raw Material Production Areas for Domestic Consumption and Export, 2022–2025. Hanoi, Vietnam.
National Agricultural Extension Center. (2025). Final report on the Pilot Program on the Development of Standardized Agricultural and Forestry Raw Material Production Areas for Domestic Consumption and Export, 2022–2025. Hanoi, Vietnam.
[1] Province names before July 2025.
Standardized Raw Material Production Areas: Vietnam's New Approach to Inclusive and Sustainable Agricultural Development
ABSTRACT
This paper analyzes Vietnam's approach to developing standardized agricultural and forestry raw material production areas by synthesizing policy documents, government agency reports, and relevant studies. The findings indicate that Standardized Raw Material Production Areas are designed not only to expand production scale but also to establish an integrated system encompassing production, processing, and marketing in compliance with requirements for product quality, food safety, traceability, environmental sustainability, social responsibility, infrastructure, and production support services. The model is based on several key approaches, including public–private partnerships, comprehensive and inclusive development, market- and supply chain-oriented development, cooperative-centered organization, and the recognition of raw material production areas as ecosystems for innovation and sustainable development. The positive outcomes achieved during the 2022–2025 period provide a foundation for scaling up the model and restructuring Vietnam's agricultural production toward a more modern, competitive, green, and sustainable agricultural sector.
Keywords: Standardized raw material production areas, public–private cooperation, agricultural cooperatives, value chain linkage, sustainable agriculture.
INTRODUCTION
As international economic integration deepens, Vietnamese agricultural products face increasing competition not only on production costs but also on product quality, supply reliability, and compliance with stricter international market requirements. High-value markets such as the European Union (EU), the United States, Japan, and many others have shifted from focusing primarily on product quality to requiring comprehensive compliance with food safety, traceability, environmental protection, greenhouse gas emission reduction, social responsibility, sustainable labor practices, and transparency throughout the value chain. Meanwhile, Vietnamese agriculture remains predominantly small-scale and fragmented, making it difficult to standardize production practices and ensure consistent product quality, thereby limiting compliance with international standards.
Although Vietnam has promoted agricultural value chain linkages for many years, they remain insufficiently sustainable. The proportion of agricultural products marketed through formal value chain arrangements is still relatively low. Many contractual partnerships remain unstable, and collaboration among enterprises, cooperatives, and farming households is often weak. Furthermore, many production areas have yet to establish large-scale production capable of delivering consistent product quality. Another key requirement is to identify an effective, sustainable model of agricultural production organization suited to Vietnam’s conditions and capable of transforming the agricultural sector’s growth model.
These challenges have created an urgent need to establish concentrated, Standardized Raw Material Production Area models supported by a unified management system to enhance the competitiveness of Vietnamese agricultural products in both domestic and international markets. In response, Vietnam launched the Pilot Program on the Development of Standardized Agricultural and Forestry Raw Material Production Areas for Domestic Consumption and Export, 2022–2025 (hereinafter referred to as the Pilot Program) under Decision No. 1088/QĐ-BNN-KTHT, issued in 2022 by the Minister of Agriculture and Rural Development (now the Ministry of Agriculture and Environment). The Pilot Program has achieved encouraging results, providing a foundation to scale up the standardized raw material production zone model nationwide from late 2026 onward.
This paper presents Vietnam's approach to developing standardized agricultural raw material production areas. The analysis is based on a review of secondary sources, including Decision No. 1088/QĐ-BNN-KTHT, reports issued by the Ministry of Agriculture and Environment, reports from provincial authorities, and relevant research studies.
OVERVIEW OF THE PILOT PROGRAM
The Pilot Program was implemented during the 2022–2025 period in 13 provinces, namely Hoa Binh, Sơn La (Northern Mountainous Region), Quang Trị, Thua Thien Hue (North Central and Central Coastal Region), Gia Lai, Đak Lak, Đak Nong, Kon Tum (Central Highlands), Đong Thap, Long An, Tien Giang, Kien Giang, and An Giang[1] (Mekong Delta). Its primary objective was to pilot the development of five Standardized Raw Material Production Areas across these provinces, generate practical lessons, and subsequently scale up the model nationwide (Ministry of Agriculture and Rural Development, 2022).
The Pilot Program aimed to:
Project 1: Investment in Regional Infrastructure to Support Cooperative-Based Raw Material Production Areas. This component included investments in rural roads connecting production areas and linking raw material zones with processing facilities; irrigation systems; cold storage facilities; collection and pre-processing centers; silos; and preservation and processing facilities; as well as infrastructure and equipment for cooperatives, such as pre-processing facilities, cold storage, irrigation systems, drying and processing facilities, warehouses, storage tanks, greenhouses, and machinery.
Project 2: Production Organization and Management of Raw Material Production Areas. This component focused on establishing and strengthening agricultural cooperatives through training, capacity building, agricultural extension, technology transfer, and digital management systems.
Project 3: Development of Community-Based Agricultural Extension and Communication. This component included establishing community-based agricultural extension models to support sustainable Raw Material Production Areas, strengthening grassroots extension services by expanding community extension groups, and implementing communication activities to promote the development of Standardized Raw Material Production Areas.
Project 4: Development of Agricultural Value Chain Linkages. This component included piloting value chain financing mechanisms; implementing agricultural insurance schemes in Raw Material Production Areas; promoting value chain linkages under Decree No. 98/2018/ND-CP; supporting sustainable management of rice-growing land; encouraging the adoption of Good Agricultural Practices (GAP) under Decision No. 01/2012/QĐ-TTg; and implementing and scaling up integrated agricultural mechanization models.
Funding for the Pilot Program was mobilized from multiple sources, including the central and local government budgets, counterpart contributions from enterprises and cooperatives, and commercial credit.
APPROACHES TO DEVELOPING STANDARDIZED RAW MATERIAL PRODUCTION AREAS
The standardized raw material production zone model is built upon a set of approaches that differ substantially from those adopted in previous production area development programs. While earlier initiatives primarily focused on expanding cultivated areas or investing in infrastructure, the Pilot Program adopts a broader perspective by treating Raw Material Production Areas as integrated ecosystems encompassing production, processing, and marketing. This approach combines multiple policy instruments, engages diverse stakeholders, and pursues multiple development objectives simultaneously. The principal approaches are summarized below.
Public–private cooperation approach
One of the Pilot Program's most significant innovations is adopting a public–private cooperation (PPC) approach to developing Standardized Raw Material Production Areas. Under this approach, the government does not directly organize agricultural production; instead, it creates an enabling environment through institutional development and investments in public goods and services. Enterprises, cooperatives, and farmers handle investment, production organization, and market development.
Within this model, the government concentrates on investments that are difficult or insufficiently attractive for the private sector, including transport infrastructure, irrigation systems, shared logistics facilities, human resource development, community-based agricultural extension services, technology transfer, agricultural data management systems, traceability systems, agricultural credit, and crop insurance. In contrast, enterprises invest in processing, storage, marketing, and market linkages; cooperatives organize production and provide production support services; and farmers contribute land, labor, and compliance with prescribed production standards. This mechanism mobilizes resources from multiple sectors rather than relying predominantly on public funding.
Implementation results indicate that counterpart contributions from enterprises, cooperatives, and farmers accounted for more than 70% of the total investment in the Pilot Program. These results show that public funding served as seed capital, leveraging substantial private investment in developing Standardized Raw Material Production Areas. More importantly, the PPC approach goes beyond financial mobilization by clearly allocating responsibilities according to each stakeholder's comparative advantages, thereby improving investment efficiency and the long-term sustainability of the production zones.
Standards-based approach
A fundamental distinction between the Pilot Program and previous production area development programs is that it aims not merely to establish large-scale production areas but to develop Standardized Raw Material Production Areas. In the Pilot Program, the concept of "standardized" is interpreted comprehensively, encompassing multiple dimensions of standards.
First, product quality standards are achieved through the adoption of good agricultural practices and internationally recognized certification schemes, such as VietGAP, GlobalGAP, the Sustainable Rice Platform (SRP) Standard, FSC, 4C, or other equivalent standards appropriate to specific commodities and target markets.
Second, food safety is ensured through production area codes, production records, databases, and electronic traceability systems.
Third, environmental standards emphasize ecological production, efficient resource use, reduced greenhouse gas emissions, circular agriculture, waste management, and biodiversity conservation. These requirements have become increasingly important as international markets place greater emphasis on green growth and low-carbon production.
Fourth, social responsibility standards focus on organizing production through agricultural cooperatives, strengthening farmers' participation, safeguarding smallholder producers' interests, enhancing community capacity, promoting equitable access to services, and ensuring compliance with labor regulations.
Fifth, standards for infrastructure and production organization include the development of transportation networks, irrigation systems, storage and pre-processing facilities, logistics services, agricultural mechanization, quality management systems, and the capacity of cooperatives and farming households, together with the development of value chain linkages that support modern, mechanized, and technology-based agricultural production.
Accordingly, the standards-based approach evaluates not only the final agricultural products but also the entire production system that generates them.
Comprehensive and inclusive development approach
A distinguishing feature of the Pilot Program is its comprehensive development approach, under which Standardized Raw Material Production Areas are developed across the entire value chain rather than a single production stage.
Accordingly, developing Raw Material Production Areas extends beyond infrastructure investment to include the simultaneous implementation of production reorganization, cooperative development, science and technology transfer, community-based agricultural extension, digital transformation, logistics development, agricultural credit and insurance, and the promotion of value chain linkages. The four project components of the Pilot Program collectively reflect this integrated approach.
The inclusive nature of the Pilot Program is demonstrated by ensuring that all stakeholder groups participate in and benefit from the development of Standardized Raw Material Production Areas. Farmers benefit from enhanced technical capacity, higher incomes, and reduced production risks. Cooperatives strengthen governance capacity and expand services for members. Enterprises gain access to stable and reliable sources of raw materials. Local governments improve governance effectiveness while promoting sustainable agricultural development. Financial institutions, insurance providers, agricultural extension organizations, and technical service providers also participate by delivering essential support services. At the same time, the Pilot Program seeks to balance the interests of all stakeholders rather than maximizing the benefits of any single group. This balanced distribution of benefits is a critical prerequisite for sustaining long-term collaboration within agricultural value chains.
Market-oriented and linked supply chain development approach
Unlike previous production development models, which were primarily supply-driven, the Pilot Program adopts a market-oriented approach, whereby market demand and enterprise requirements serve as the starting point for developing Standardized Raw Material Production Areas. Under this approach, enterprises and target markets determine commodity selection, production zone scale, production protocols, and infrastructure investments.
Within this framework, enterprises play roles beyond product procurement. They participate from the outset by defining raw material quality standards, providing technical guidance, entering into procurement contracts, and investing in pre-processing and processing facilities. Agricultural cooperatives serve as the organizational hub for coordinating production in line with enterprise requirements, while farmers implement production practices jointly agreed upon by enterprises and cooperatives (Hoang and Pham, 2026). As a result, both the number of value chain partnerships and the number of enterprises participating in Standardized Raw Material Production Areas increased substantially during the Pilot Program.
Cooperative-centered approach to organizing raw material production areas
A central principle of the Pilot Program is to position agricultural cooperatives as the core organizational units of Standardized Raw Material Production Areas. Because agricultural production in Vietnam remains predominantly smallholder-based, enterprises cannot contract with and manage thousands of individual farming households directly. Agricultural cooperatives are therefore designated as intermediary organizations responsible for mobilizing farmers, coordinating production, providing production support services, managing product quality, and representing farmers in contractual arrangements with enterprises.
Strengthening the development and role of agricultural cooperatives is one of the core objectives of the Pilot Program. Cooperatives implement most support activities, including infrastructure investment, capacity building, technology transfer, information technology application, access to credit, and logistics development.
Implementation results show that more than 390 agricultural cooperatives participated in the Standardized Raw Material Production Areas. Many of these cooperatives have gradually evolved from providers of input supply services into organizations that coordinate value chains and represent farmers in business partnerships with enterprises. Consequently, Standardized Raw Material Production Areas are built not on direct contractual relationships between enterprises and individual farmers, but on a three-tier organizational structure comprising enterprises, cooperatives, and cooperative members, with agricultural cooperatives serving as the central coordinating institution.
Developing standardized raw material production areas as an innovation and sustainability ecosystem
Beyond the approaches discussed above, the Pilot Program conceptualizes Standardized Raw Material Production Areas as ecosystems for innovation and sustainable development, in which infrastructure, science and technology, digital transformation, community-based agricultural extension, logistics, agricultural credit, insurance, and data governance are developed in an integrated manner to support production organization.
A notable feature of this approach is that digital transformation and logistics are not treated as standalone objectives but as enabling instruments for improving governance in Raw Material Production Areas. Digital platforms, traceability systems, production databases, and logistics infrastructure reduce transaction costs, improve transparency, and strengthen governance. At the same time, the Pilot Program integrates environmental protection, climate change adaptation, greenhouse gas emission reduction, and ecological agriculture into the development of Standardized Raw Material Production Areas.
This approach demonstrates that Standardized Raw Material Production Areas are conceived not merely as agricultural production areas but as integrated economic, technological, social, and environmental ecosystems. Through the coordinated development of these interconnected components, the model provides a foundation for a modern, efficient, sustainable, and competitive agricultural sector.
OUTCOMES OF THE DEVELOPMENT OF STANDARDIZED RAW MATERIAL PRODUCTION AREAS
After four years of implementation, the Pilot Program has achieved encouraging results. The total area of Standardized Raw Material Production Areas increased by 20% compared with the pre-project period. More than 123 new agricultural cooperatives were established, and thousands of cooperative managers and members received training to strengthen their capacities, including using accounting software and product traceability systems (National Agricultural Extension Center, 2025; Department of Cooperatives and Rural Development, 2025). Overall, the Pilot Program has generated several significant outcomes.
Transformation of the functions and organizational model of Raw Material Production Areas. Integrated infrastructure investment has restructured the entire value chain, fundamentally transforming the roles of cooperatives, enterprises, and Raw Material Production Areas. Agricultural cooperatives have evolved from being production units into value chain coordination and integration hubs. Enterprises have shifted from primarily purchasing commodities to leading processing, marketing, and exporting agricultural products. Raw Material Production Areas have shifted from isolated production areas to core value chain hubs that integrate production, logistics, processing, and marketing. As a result, these zones now serve not only as production areas but also as platforms for modern agricultural value chains that connect public investment, leverage private investment, enhance rural livelihoods, and promote green, sustainable, and scalable agricultural development.
Reduced production and logistics costs. Infrastructure investments reduced production and logistics costs by about 20–30% while also shortening transportation time for agricultural products.
Lower post-harvest losses and improved product quality. Investments in storage facilities, drying yards, and pre-processing centers reduced post-harvest losses from 10–12% to 7–9%, for example in fruit and coffee production (Department of Cooperatives and Rural Development, 2025). This improvement is particularly important for highly perishable products such as tropical fruits, contributing to higher market value and longer storage life.
Higher productivity, increased incomes, and more stable employment. Average household income increased by 5–10%. Particularly, rice farmers in An Giang and Kien Giang provinces increased their income by 10-12% (Department of Cooperatives and Rural Development, 2025). The Pilot Program also created thousands of new jobs, particularly in operating irrigation pumping stations, pre-processing facilities, and agricultural mechanization services.
The program strengthened agricultural cooperatives and value chain linkages. The proportion of agricultural products marketed through cooperatives increased substantially from 35% to 57%. Approximately 71.2% of the standardized raw material production area became linked to enterprises through marketing agreements, compared with only 12.5% before the Pilot Program. The number of participating enterprises and processing plants increased from 11 at the beginning of the Project to 27.
Enhanced the effectiveness of public investment and promoted public–private cooperation (PPC). On average, each unit of investment from the central government budget leveraged 5.8 units of funding from other sources. This demonstrates the effectiveness of public investment as seed capital, stimulating private investment in infrastructure that supports partnerships among cooperatives, enterprises, and farmers.
CONCLUSION
The development of Standardized Raw Material Production Areas represents a new approach that is well aligned with Vietnam's transition toward a modern, efficient, sustainable, inclusive, and market-oriented agricultural sector. The distinctive feature of this model lies not merely in establishing large-scale production areas, but in integrating the entire production–processing–marketing system in line with standards for product quality, food safety, traceability, environmental sustainability, social responsibility, infrastructure, and production organization. The model also combines a public–private partnership approach, with agricultural cooperatives serving as the core production organizations, enterprises acting as market leaders, and the government playing an enabling role through infrastructure investment, the provision of public services, and improved institutional support mechanisms.
The results of the 2022–2025 pilot phase demonstrate that the model has generated significant improvements in production organization, cooperative capacity, value chain linkages, and investment effectiveness. The area of Standardized Raw Material Production Areas, the proportion of agricultural products marketed through cooperatives, and the area under enterprise-linked production all increased substantially. At the same time, production costs, logistics costs, and postharvest losses declined, while farmers' incomes improved. Notably, public investment effectively functioned as seed capital, leveraging substantial financial contributions from enterprises, cooperatives, and farmers.
These outcomes confirm that Standardized Raw Material Production Areas can serve as a strategic platform for restructuring agricultural production, enhancing competitiveness, and meeting increasingly stringent market requirements. They also provide a solid foundation for expanding the model nationwide from 2026 onward and for developing a national framework of standards, along with a comprehensive policy system, to support the development of Standardized Raw Material Production Areas.
REFERENCES
Department of Cooperatives and Rural Development (2025). Final evaluation report on the Pilot Program on the Development of Standardized Agricultural and Forestry Raw Material Production Areas for Domestic Consumption and Export, 2022–2025 under Decision No. 1088/QĐ-BNN-KTHT. Hanoi, Vietnam.
Hoang, V. Q., & Pham, Q. T. (2026). Comprehensive evaluation report on the Pilot Program on Standardized Raw Material Production Areas and related policies, with proposed criteria and policy recommendations to promote the development of Standardized Raw Material Production Areas linked to agricultural value chains under Decree No. 98/2018/ND-CP. Hanoi, Vietnam.
Ministry of Agriculture and Rural Development (2022). Decision No. 1088/QĐ-BNN-KTHT dated 25 March 2022 approving the Pilot Program on the Development of Standardized Agricultural and Forestry Raw Material Production Areas for Domestic Consumption and Export, 2022–2025. Hanoi, Vietnam.
National Agricultural Extension Center. (2025). Final report on the Pilot Program on the Development of Standardized Agricultural and Forestry Raw Material Production Areas for Domestic Consumption and Export, 2022–2025. Hanoi, Vietnam.
[1] Province names before July 2025.