Agriculture: The 'most difficult but most worthy' sector for digital transformation

Strengthening capacity in digital application for cooperatives is vital

On the morning of October 29 in Hanoi, Business Magazine hosted the forum "Digital transformation in agriculture: Seizing opportunities, adapting to the future," chaired by the Viet Nam Cooperative Alliance.

Cao Xuan Thu Van, Chairwoman of the Viet Nam Cooperative Alliance, stated that digital transformation is opening a new, sustainable, and prosperous path for Vietnam's agricultural sector. The sector currently contributes 12-14% of GDP, and its agro-forestry-fishery exports are overcoming numerous barriers, aiming to reach at least 65 billion USD by 2025.

"It must be affirmed that digital transformation has been, is, and will help the Vietnamese agricultural sector optimize productivity, reduce production costs, and enhance competitiveness," Van said. She added that it also helps solve complex challenges like climate change, meeting sustainable development standards, the green transition, international competition, and the pressure to increase productivity. Furthermore, it improves farmers' livelihoods and increases revenue for agricultural cooperatives and agribusinesses.

"For agricultural cooperatives specifically, digital transformation is the leverage for growth when participating in the global value chain," Van emphasized.

Van noted that with more than 22,500 agricultural cooperatives nationwide, enhancing digital technology application capacity is "not just a mandate but an imperative." She warned that failing to do so means "being left behind and exiting the game" amid today's increasingly fierce competition.

Digital transformation among cooperatives nationwide reaches only 32%

A recent survey by the Viet Nam Cooperative Alliance revealed that the digital transformation rate among cooperatives nationwide is only 32%. Of the nearly 35,000 cooperatives surveyed, only 13.6% have completed their digital transformation, 50% are in the process, and 36.4% have not yet begun.

Van frankly admitted that the pace of digital transformation in agriculture, particularly within cooperatives, lags behind other economic sectors. The majority of farmers and cooperatives still rely on traditional cultivation and production methods. Furthermore, IT infrastructure in rural areas remains weak, and there is a shortage of human resources skilled in agricultural digital technology.

"If cooperatives in remote and isolated areas can use digital platforms to sell their products to the world, that will be the true success of national digital transformation," said Tran Duy Ninh, Director of the National Digital Transformation Authority (under the Ministry of Science and Technology).

Van identified five main challenges for agricultural cooperatives in digital transformation: finance, technology infrastructure, human resource shortages, development strategy, and policy access.

A psychological reluctance to change also poses a significant obstacle. Van noted that many farmers and cooperative members are accustomed to traditional farming methods, are hesitant to apply new technologies, and lack confidence in the effectiveness of digital solutions.

"Additionally, an invisible barrier is that many cooperatives and farming households still misunderstand the true nature of digital transformation. A common misconception is equating it with chasing 'flashy' technologies like artificial intelligence (AI), blockchain, big data, or the Internet of Things (IoT)," Van added.

Value chain linkages and building a digital ecosystem

According to Le Duc Thinh, Director of the Department of Cooperatives and Rural Development (under the Ministry of Agriculture and Environment), value chain linkages and the construction of a digital ecosystem are two crucial pillars of modern agriculture. He described them as the foundation for enhancing competitiveness, ensuring transparency in production and consumption processes, and building trust in domestic and international markets.

Regarding the current state of digital transformation and value chain linkages, Thinh assessed that while Viet Nam has a robust agricultural sector that is highly regarded internationally, its digital transformation process, especially within the collective economy and cooperative sector, still lags behind many other countries.

On the state of agricultural linkages, statistics from the Ministry of Agriculture and Environment show approximately 7,000 linkage models nationwide. Among these, about 3,000 models operating under Decree 98 involve 4,000 cooperatives and 600,000 farmer households.

However, despite these positive results, agricultural linkages still exhibit four major weaknesses:

• Low participation: The linkage rate is low, with only about 25% of cooperatives participating.
• Superficial linkages: Connections are shallow, often limited to seasonal purchasing and selling, lacking shared risk, mutual benefits, and joint investment.
• Lack of oversight: There is a shortage of monitoring mechanisms, data, and traceability tools, limiting quality control of agricultural products.
• Weak investment in raw materials: There is little motivation to invest in raw material zones, with many enterprises only participating in consumption rather than partnering with farmers throughout the production process.

To promote both digital and green transitions in agriculture, Thinh recommended quickly finalizing the legal framework for chain linkages and digital ecosystems. He also called for building a centralized, unified database, enhancing the capacity of cooperatives (as the "center of the linkage chain"), strengthening international cooperation, applying technology, and encouraging business investment in digital transformation.

"A digital ecosystem in agriculture not only creates transparency and efficiency in production but also opens a new, greener, smarter, and more sustainable development space for Vietnam's agriculture during its integration period," Thinh affirmed.

Tran Duy Ninh, Director of the National Digital Transformation Authority (Ministry of Science and Technology), shared his perspective: "We have always considered agriculture one of the most difficult but most worthy sectors for digital transformation. It is difficult because of its small-scale, fragmented production, weak infrastructure, and limited connectivity."

Ninh announced that the upcoming Law on Digital Transformation is expected to be passed by the National Assembly on Dec. 11, 2025. This law contains three main points relevant to agriculture.

First, the law institutionalizes all resources for digital transformation. For the first time, it will legally mandate that 1% of the total budget be allocated to digital transformation. This is a significant step, as this figure was previously just a guideline and not legally binding.

Second, it establishes a national overall architecture framework. The Ministry of Science and Technology issued this framework on October 8. It serves as the core platform for deploying information systems, databases, and digital platforms, ensuring uniformity from the central to local levels. The framework consists of two main components: a shared component and a specific-use component. The shared component will directly impact cooperatives, farmers, and production facilities.

Regarding data infrastructure, the data sector is currently managed by the Ministry of Public Security. The Ministry of Science and Technology is building a National Data Center and is consulting with other ministries, sectors, and localities to determine usage needs.

Based on these practical conditions, the Director of the National Digital Transformation Authority made several proposals:

First, within the national overall architecture framework, the Ministry of Agriculture and Environment should build a specific framework for the agricultural sector, which must include a dedicated branch for the cooperative sector.

Second, national agricultural data must be standardized. He proposed adding cooperative data to the group of 116 key national databases managed by the Ministry of Public Security.

Third, accelerate the "Digital Cooperative" platform. This will be a shared platform, saving cooperatives from having to individually rent or develop their own management software.

Fourth, expand technology exchanges, which would help cooperatives access, rent, or purchase suitable digital solutions.

"Furthermore, in the coming period, the three important pillars of agricultural digital transformation will be: infrastructure and data; shared digital platforms; and human resources with business partnerships," Ninh added.