Farmers Support Fund: An effective and humane capital channel

After nearly 10 years (2015-2024), the Thai Nguyen Farmers Support Fund was established. Up to now, the total accumulated and revolving loan capital of the fund has reached over 151 billion VND, with 268 projects for 2,437 households. The projects focus on the fields of livestock, crop cultivation, investment in processing, and improving product quality. With many incentives and differences compared to other credit sources, especially in terms of community cohesion and mutual support, the Farmers Support Fund's capital channel demonstrates its humanity by helping thousands of members and farmers have more favorable conditions to develop and improve production and business efficiency.

From the loan capital and accompanying support activities of the Farmers Support Fund, many members and farmers in the province have risen up to develop production, successfully build typical agricultural products, and form value chain links in agricultural production. Photo: TL

Creating a "foundation" for farmers to rise up

In recent years, Phu Cuong commune (Dai Tu) is one of the localities with many changes in tea production and processing. From mainly selling fresh tea buds to traders, many households in the commune have opened tea processing workshops at home, linking together to establish tea cooperatives and cooperatives (THT, HTX) to develop production, increase income, and gradually build product brands. This change started when people were able to borrow capital from the Provincial Farmers' Support Fund (HTND) through two projects "Improving and caring for safe tea" (2016) and "Care and improving safe tea" (2022), with a capital of 400 million VND/project.

Ms. Nguyen Thi Thang, in Na Man hamlet, Phu Cuong commune, excitedly said: Before, I only grew 3-4 sao of tea, and mainly sold fresh, at a price of only 30-40 thousand VND/kg. In early 2022, I was one of 10 households approved by the Provincial Farmers' Association (HND) for a loan of 40 million VND. With this amount of money, I renovated the hill to grow tea. In addition, I also participated in training courses on tea planting, care, processing techniques, and organic fertilizer support... Up to now, the tea area has been harvested from 7-9 crops/year, I process and sell about 50% of dried tea buds myself, at a price of 200-400 thousand VND/kg, thanks to which my life has improved a lot compared to before.

The family of Mrs. Nguyen Thi Thang (Mrs. Thang is standing second from the left), in Na Man hamlet, Phu Cuong commune, Dai Tu, is one of the households receiving capital support from the Farmer Support Fund and training in tea planting and care techniques under the project "Improving and caring for safe tea".

In Uc Ky commune (Phu Binh), Mr. Duong Van Duy, Director of Hong Ky Agricultural Service Cooperative, shared: Thanks to the capital of 60 million VND borrowed from the Farmers' Association Fund, I have renovated the production facility, invested in packaging, product labels, purchased more raw materials... Participating in the loan project, I also regularly introduce, promote, and support product branding. Up to now, the Cooperative has 3 products recognized as meeting 3-star OCOP standards. On average, each month, the Cooperative sells 1,000-1,200 liters of soy sauce and more than 20 tons of rice to the market. The Cooperative's products have been and are being consumed stably in the store system in the province and many provinces and cities across the country. In 2023, the product "Hong Ky sticky rice sauce" was honored by the Provincial Farmers' Association as a typical agricultural product.

As of June 2024, the total capital of the People's Credit Fund managed and built in the province is 62.5 billion VND (of which, the central level is more than 13.6 billion VND, the provincial level is more than 35 billion VND, the district level is 13.5 billion VND). Currently, the loan amount for group projects and households is from 400 million to 1 billion VND (average level is 700 million VND/project, 70 million VND/household). The maximum loan term is 36 months, the loan fee is 0.7%/month (8.4%/year).

Mr. Le Dam Ngoc, Deputy Head of the Executive Board of the Farmers' Association Fund (Provincial Farmers' Association), said: Through projects, professional association branches built from borrowing capital from the Farmers' Association Fund have connected farmers together, attracted members to participate in association activities, promoted the movement "Farmers compete in good production and business, unite to help each other get rich, reduce poverty sustainably"; created a solid foundation for establishing cooperatives, agricultural cooperatives, linking production and business according to the value chain, forming concentrated production areas. More and more projects are developing production in the direction of VietGAP, organic, circular agriculture with high economic value. In 2023 alone, through the activities of the Farmers' Association Fund, associations at all levels have guided the establishment of 15 new cooperatives and 32 cooperatives, and recruited 3,200 new members...

Solving the "capital thirst" problem

The difference of the People's Credit Fund is that it is not for profit but for community and mutual support. The Fund lends according to projects for groups of households that produce and trade the same type of product or industry, encouraging the development of local resources and strengths of each region. The main borrowers are average and well-off households (flexible with poor and near-poor households) with determination and aspiration to get rich. The lending interest rate is lower than that of commercial banks; the loan limit is suitable for the production and business premises and the borrower's ability to pay; the lending period is suitable; the loan procedures are simple...

Borrowers do not have to mortgage but are guaranteed by the People's Credit Fund at all levels, are approved publicly and democratically, have a management board and project operating regulations. In recent times, projects and People's Credit Funds have maximized the effectiveness of loans, mutual support, solidarity and assistance among borrowers.

In particular, before and during the project, borrowers are trained in technology transfer, production linkage, experience exchange in production and business within the same group and between localities, and support in brand building and product promotion.

With capital support through the Farmer Support Fund, Hong Ky Agricultural Service Cooperative, in Uc Ky commune (Phu Binh), has developed 3 products of soy sauce and Thau Dau sticky rice that have achieved 3-star OCOP.

However, compared to the borrowing needs of members, the scale and loan limit of the Fund are currently not commensurate, not meeting the wishes of borrowers. Ms. Pham Thi Nhung, Chairwoman of the Farmers' Association of Kha Son Commune (Phu Binh), said: Many members do not have collateral or are not policy beneficiaries, so they are not eligible to borrow capital from other credit institutions. Therefore, if the capital source of the Farmers' Association Fund is increased and expanded, it will help farmers have the opportunity to expand production and improve the efficiency of economic models.

The province currently has 177 association bases, with over 162,000 members, including over 55,000 households with good production and business skills at all levels. Meanwhile, the People's Credit Fund is providing loans to 80 projects, lending to 904 households to develop production. This means that the above capital source only meets a small part of the demand.

To ensure the operation of the Farmers' Association Fund is more professional and effective, recently, the Provincial Farmers' Association has submitted to the Provincial People's Committee the Project "Improving the organization and operation of the Farmers' Association Fund of Thai Nguyen province", in which it is proposed to supplement new public investment capital of 30 billion VND (increasing the charter capital to 67.6 billion VND in the period of 2025-2030). The approved project will meet the aspirations, create more opportunities and fulcrum for members and farmers to develop the economy and get rich on their homeland...

Source: https://baothainguyen.vn/kinh-te/202410/quy-ho-tro-nong-dan-kenh-dan-von-hieu-qua-nhan-van-71b1923/