Cooperatives - from a 'vulnerable factor' to a 'resilient system' of agriculture

Within just five years, the area of rice damaged in Vietnam nearly tripled, from 129,039 hectares in 2021 to 387,215 hectares in 2025. The number of poultry deaths due to natural disasters and disease rose from 367,914 to more than 5.1 million, while the number of damaged aquaculture cages increased from 448 to 171,763. These figures are not merely losses; they are warning signals of an agricultural system increasingly vulnerable to compounded shocks.

Meanwhile, globally, fertilizer prices at times surged two to three times due to geopolitical conflicts, logistics costs rose by up to 40%, and more than 800 million people continue to face food insecurity. A growing paradox is becoming evident: producing more, yet becoming more fragile.

Global agriculture is entering an unprecedented period of uncertainty, where shocks are no longer cyclical but have become persistent and increasingly overlapping. The COVID-19 pandemic disrupted supply chains that had been optimized under globalization logic; climate change continues to intensify both the frequency and severity of extreme weather events; meanwhile, geopolitical conflicts in key regions such as Eastern Europe and the Middle East are directly affecting the supply of energy and agricultural production inputs.

Limits of market mechanisms and the need to reorganize production

Recent shocks have exposed fundamental limitations of small-scale agricultural production, which heavily depends on spontaneous market mechanisms. When markets fluctuate, individual farmers often lack sufficient information and capacity to forecast supply-demand trends, lack bargaining power over prices, and are unable to organize logistics activities such as collection, storage, and transportation.

The reality in 2021 clearly demonstrated this, when many localities experienced a “dual disruption”: agricultural products were oversupplied in production areas but could not reach consumer markets, while shortages occurred elsewhere.

From a theoretical perspective, this is a typical manifestation of “high transaction costs” in agricultural economies, where incomplete information, small-scale production, and the absence of strong intermediary institutions hinder coordination. In such cases, free markets cannot self-correct efficiently, requiring collective organizational forms to reduce transaction costs, enhance coordination, and improve the overall performance of the agricultural system.

Cooperatives as a resilience institution of agriculture

Amid increasingly complex global economic fluctuations, cooperatives are gradually being recognized not just as a production model but as institutions capable of stabilizing agricultural systems. According to the International Cooperative Alliance, there are currently more than 3 million cooperatives worldwide, with over 1 billion members, accounting for about 10% of total global employment.

Unlike purely profit-driven enterprises, cooperatives operate on the basis of shared benefits and risks among members. They do not pursue short-term profit maximization but instead focus on long-term value and community stability. This characteristic creates superior resilience to economic shocks, market volatility, and natural disasters.

In Vietnam, awareness of this role has been elevated by Resolution No. 20-NQ/TW of the 13th Party Central Committee, which affirms that the collective economy, with cooperatives at its core, is an important economic sector alongside the state economy, forming a solid foundation of the national economy.

This shift is not only policy-related but also reflects a fundamental change in development thinking: from viewing cooperatives as a sector in need of support to recognizing them as a key structural component capable of reinforcing the foundation and resilience of the agricultural system under uncertainty.

Redefining the role of cooperatives in an uncertain era

In the context of increasingly complex and unpredictable global economic changes, the role of cooperatives is undergoing a fundamental transformation, not only in function but also in position within the agricultural system. From being production-support organizations, cooperatives are becoming market organizers, actively participating in stages from production and preliminary processing through processing to consumption and even export.

This transformation is not merely adaptive but reflects an inevitable trend in conditions where small-scale production dominates. In the near future, cooperatives will not only organize production but also serve as platforms that integrate agricultural data, support market forecasting, and enable traceability and quality management.

More importantly, in a world where risk is becoming the norm, cooperatives are emerging as effective risk management tools. By sharing information, distributing risks, and organizing production collectively, cooperatives help minimize the impacts of market fluctuations, natural disasters, and epidemics on individual farmers.

Cooperatives are not just an economic model but an institutional structure capable of stabilizing and enhancing the resilience of the entire agricultural production system. When farmers are organized within cooperative structures, they not only improve production capacity and market access but also gain the ability to share risks and better adapt to changing conditions.