COOPERATION WITH PROCESSING ENTERPRISES: THE FULCRUM FOR SUSTAINABLE AGRICULTURAL PRODUCT CONSUMPTION

Pineapple processing at Dong Giao Export Food Joint Stock Company, Tam Diep city. (Photo: Thuy Dung / VNA)

Possessing 5ha of pineapple cultivation, but for many years, Mrs. Vu Thi Ha's family, Quang Son commune, Tam Diep, Ninh Binh province don't have to worry about consuming products.

Where the product is harvested, it is consumed right there. Because she, like many households in the commune, has signed production and sale contracts with enterprises.

Not only Ninh Binh, in many other localities, the cooperation with processing enterprises is considered a firm fulcrum of farmers in the production and consumption of agricultural products.

Ms. Vu Thi Ha said that she signed a contract with Dong Giao Export Food Joint Stock Company (DOVECO) in the form of contracting output of products per hectare and purchased at a fixed price no matter how the market price fluctuates.

When harvested, the output is higher than contracted by good intensive farming, high yield, she is completely free to decide to sell to the company at the agreed price or sell to the outside.

Not only assured of output, when producing, she also received support from the company in terms of seeds, fertilizers and farming techniques. Therefore, despite the signing of a 20-year cooperation agreement, Ms. Vu Thi Ha's family currently has no orientation to change crops or does not cooperate with enterprises. Since the cooperation, her family has always been assured of production, income and efficiency.

Quang Son commune has over 3,500 ha, with the main production being pineapple, sugarcane, banana and tea. In recent years, people have given up sugar cane because of ineffectiveness, low price, and the output signed with factories not stable.

Now, the local production area is mainly planted by pineapple farmers to provide raw materials for DOVECO.

Mr. Le Van Thi, Head of Quang Soi Cooperative, Quang Son Commune said that the cooperative has 100 main pineapple growers, signed with DOVECO.

People in Quang Son commune, Tam Diep city, harvest pineapples. (Photo: Thuy Dung / VNA)

The company invests in seeds, fertilizers, product consumption, farming techniques. Farmers just follow the correct technical process and deliver products according to the contract.

Thus, when cooperating with enterprises, farmers are completely assured of production, do not have to worry about capital, science and technology and absolutely do not worry about output.

Having also experienced production without a contract with enterprises, Mr. Le Van Thi said that there are times when the market is good, but sometimes the price is pressed by private traders.

Most of the time when the season comes, when there are events about epidemics and difficult weather, the prices are pressed by private traders, not to mention difficulties in the consumer market.

But now, when linked with businesses, businesses will come up with production plans for cooperatives. Farmers only adhere to the right plan and technique to have the right product at the right time.

Currently, the plan of the business is to have products all year round, so the cooperative spreads new crops continuously to meet the supply of raw materials under the contract.

With the peace of mind, certainty and efficiency in production when there is a contract with such an enterprise, Mr. Le Van Thi said that in the coming time, the cooperative will convert cultivated areas which for not high efficiency, has not signed with enterprises to produce with contracts with enterprises.

Looking back at the cases in some localities as well as some items that had to be called for rescue, Mr. Pham Ngoc Thanh, Deputy General Director of DOVECO said that the first important solution is to capture the signal of the market.

Production planning and planning must follow the market orientation, market demand, associated with processing and business needs. Farmers should not focus on production according to the market trend, when seeing high prices, massively planting leads to oversupply.

On the basis of sharing and cooperation, DOVECO has had certain success in production association and created raw material areas with stable areas for factories.

This success is that the unit has invested all of its inputs, transferred the technical process and is committed to selling products at the prices in the contract, so people are closely attached to the company.

In the implementation process, there are also certain difficulties such as farmers do not know the production process, sometimes the quality is not guaranteed, or there are also contract breaks ... but in the long run, farmers have also realized the effectiveness when cooperating with businesses.

Not only linking production with farmers in Ninh Binh, to meet the processing needs of 3 factories in Ninh Binh, Gia Lai, Son La with the need of 20,000-25,000 hectares to create raw materials for each factory, DOVECO always has to find and expand production area by linking production.

Also one of the leading enterprises in the processing of agricultural products, Mr. Nguyen Lam Vien, Chairman of Vinamit Joint Stock Company, said that farmers are both landlords and tenants.

Farmers can lease land to businesses and work for businesses again. Instead of farmers selling orchards to traders, they sell to businesses and produce in the way of businesses.

To build its own material zones, Vinamit has directly linked with farmers with the "shared agriculture" method: risk sharing, success sharing with farmers.

With sharing agriculture when the two sides are "win-win", the farmers feel safe, Mr. Nguyen Lam Vien said.

Drying with honey-soaked lemons for export to Japan. (Photo: Minh Hung / VNA)

Processing enterprises with a large investment will be knowledgeable and flexible about the market. But with enterprises, the State should orient the way for enterprises to have good and stable raw material areas; has an investment department for market research, information to support business orientation and farmers, Mr. Pham Ngoc Thanh suggested.

With the problem of reducing risks in consumption, Deputy Minister of Agriculture and Rural Development Le Minh Hoan also said that the story of agricultural product consumption is to define the market and produce according to market signals.

The determination and forecast of that market is from state management agencies and enterprises. They bring that information back to farmers according to each industry association.

"In the old days we used to support input, but today we have to enable output to ensure input. If we only worry about supporting input without output, it will lead to congestion, value of the product is not high. The activation of the output to orient agricultural production towards clean products, based on resources and culture, will build the brand, "Deputy Minister Le Minh Hoan pointed out.

In order to create raw material areas large enough to create attractive investment for businesses, Deputy Minister Le Minh Hoan said that localities need to get out of their administrative boundaries and look outside to together, create a cluster of industry links in any locality with the same production ecology to form the industry ecosystem.

Source: https://www.vietnamplus.vn/hop-tac-voi-doanh-nghiep-che-bien-diem-tua-tieu-thu-nong-san-ben-vung/703546.vnp

Publication date: April 02, 2021.