Decree 156: Capital leverage helps cooperatives expand production and increase the value of agricultural products

Capital difficulties of agricultural cooperatives

Agricultural cooperatives are facing capital difficulties as their mortgaged assets at banks prevent them from expanding production. In the context of increasingly narrowing land funds for production, Decree 156, which raises the unsecured loan limit from VND3 billion to VND5 billion, is expected to help cooperatives solve this problem.

Nghị định 156: Đòn bẩy vốn giúp hợp tác xã mở rộng sản xuất và nâng giá trị nông sản- Ảnh 1. — *Mr. Lam Ngoc Tuan - Director of Tuan Ngoc Agricultural Cooperative checks the quality of green vegetables at the farm.*

Reality from cooperatives

Mr. Lam Ngoc Tuan - Director of Tuan Ngoc Agricultural Cooperative, Ho Chi Minh City shared: "It is impossible to increase the area, nor to meet the demand for clean agricultural products for consumers if we only grow according to current capacity. If we can access capital, the efficiency will be better, the area and output will increase."

In previous harvests, Tuan Ngoc Cooperative purchased about 500 tons of durian for its members. This year, the agricultural product backlog has caused durian to sell at a record low price, only about 10,000 VND/kg. However, if the segments are separated for processing and frozen for export, the value of the agricultural product can increase 3 to 4 times. To do this, the Cooperative needs capital to invest in cold storage.

Role and expectations of cooperatives

Ms. Dang Thi Thuy Nga - Director of Xuan Dinh Agricultural Service Trading Cooperative, Dong Nai said: "We have a project to connect with a unit to build a cold storage warehouse and are just waiting for capital to operate. Currently, we only sell fresh due to financial constraints. Preferential loans combined with OCOP support with capital under 20 billion VND will help the cooperative operate effectively."

According to experts, small-scale production makes it difficult for cooperatives to master raw material areas and apply high technology. Decree 156 allows loans of up to VND5 billion without collateral, as long as there is a clear production and business plan. Circular and organic agricultural projects can also borrow up to 70% of the investment value.

Nghị định 156: Đòn bẩy vốn giúp hợp tác xã mở rộng sản xuất và nâng giá trị nông sản- Ảnh 2. — *Dr. Nguyen Dang Nghia* – Agricultural economist

Dr. Nguyen Dang Nghia - Agricultural economics expert commented: "The Decree creates conditions for those who know how to do it and use capital effectively. Green, circular projects with social and environmental benefits can borrow 70% of the capital, which is a great encouragement for farmers."

Mr. Ngo Xuan Chinh - Director of the Center for Research and Transfer of Agricultural Technology Advances, Southern Institute of Agricultural Science and Technology emphasized: "Urban agricultural production must follow the direction of high technology to create value. Farmers need to clearly identify the products and investment technology, otherwise it will lead to failure despite large investment capital".

Cooperatives are an important link in bringing Vietnamese agricultural products to nearly 200 countries and territories with an export turnover of tens of billions of USD. Cooperatives want banks to speed up disbursement so that capital can reach their hands soon, contributing to effective and sustainable investment in the context of many fluctuations in the world economy.