Enhancing agricultural competitiveness through green value chain linkages

After 6 years of implementing Decree No. 98/2018/ND-CP, more than 2,900 linkage projects have been established nationwide, connecting over 200,000 farming households with enterprises, cooperatives, and production groups. These linkage models have become the core axis of agricultural restructuring, enabling Vietnamese products to move deeper into global value chains.

VND 15.2 trillion mobilized for agricultural value chains

At a review conference held on November 11, the Department of Cooperative Economy and Rural Development assessed that Decree 98 had “addressed the critical bottleneck” by establishing both legal and financial frameworks to foster cooperation and connectivity among stakeholders in the production, processing, and distribution of agricultural products.

More than VND 15.2 trillion (approx. USD 600 million) has been mobilized for linkage projects, of which state funding accounts for only 21%. At the same time, the rest comes from businesses and farmers themselves, reflecting a spirit of co-investment and shared benefit.

In the past, linkage contracts primarily involved buying and selling agricultural produce. Today, many models have evolved toward value chain management. A notable example is the Long Thanh Phat Cooperative (Dong Nai). Local chicken farmers sign contracts with KOYU & UNITEK Company and also directly negotiate with suppliers of feed, veterinary medicine, and transport services. This model helps reduce intermediary costs, stabilize output markets, and enhance farmers’ bargaining power.

Among the 2,938 approved projects, 79% are led by cooperatives, and the rest by enterprises. Linkage models are most common in crop production (67%), followed by livestock (24%) and forestry (6%).

Key national commodities such as rice, fruits and vegetables, coffee, rubber, and pepper now have closely integrated value chains, helping standardize production processes, ensure traceability, and improve export competitiveness.

Cooperatives are regarded as the “backbone” of these linkage models. Acting as intermediaries between enterprises and farmers, they help organize consolidated material zones, unify technical standards, control quality, and ensure contract compliance. When joining the value chain, around 60% of cooperatives expand their operations, improve management capacity, and increase members’ income.

The Department noted that many provinces, such as Dong Thap, Son La, and Lam Dong, have established advisory networks and community-based agricultural extension teams to assist cooperatives in developing feasible linkage projects. As a result, large-scale raw material zones have been created for processing and export enterprises.

By the end of 2025, the value of agricultural products produced under cooperative or linkage forms has tripled compared to 2016, reaching over 32%, with key commodities such as cashew, pepper, and coffee achieving linkage rates between 40% and nearly 65%. Every 1 dong of state budget invested has attracted 4.6 dong of private capital into the linkage chains.

However, despite these achievements, the implementation of Decree 98 still faces certain limitations. In many provinces, efforts remain focused mainly on sales contracts rather than on building comprehensive value chains. Support policies are still project-based, lacking incentives for green innovation and eco-technological applications.

Some regulations on contract duration and eligibility for support remain rigid, making it difficult for small businesses and cooperatives to access assistance.

Focusing on institutional reform and value chain development

The Ministry of Agriculture and Environment is finalizing a draft decree to replace Decree 98, adding mechanisms to promote the development of green value chains and standardized raw material zones for export. The new framework will align these linkages with major national programs, such as the “One million hectares of high-quality, low-emission rice in the Mekong Delta” project and circular, low-emission agricultural models.

Delivering his keynote address, Deputy Minister Vo Van Hung emphasized: “Value chain linkages are the institutional key to building a modern, climate-resilient, and competitive agriculture. This is not only a directive but also a strategic vision for the future of Viet Nam’s agricultural sector”.

According to the Deputy Minister, after 6 years of implementing Decree 98, flagship products such as ST25 rice, Buon Ma Thuot coffee, Binh Phuoc cashew, and southern fruits have established large-scale, internationally certified production zones, helping elevate Viet Nam’s agricultural brand.

He attributed this success to the trust and cooperation among the "Three Houses" - the State, Enterprises, and Farmers - sharing both benefits and risks to build sustainable value chains and collective strength. “Today, value chain linkages are no longer just purchase contracts,” Deputy Minister Hung affirmed. “In the digital economy era and with Viet Nam’s Net Zero commitment by 2050, green, low-emission agricultural value chains with traceability and carbon trading will become a new economic driver for Vietnamese farmers and enterprises.”

Deputy Minister also candidly acknowledged existing weaknesses. Many linkages remain unsustainable, lacking closed value cycles; administrative procedures for support are still cumbersome; digital and green linkages have not received adequate attention; and production organization is still not fully aligned with standardized raw material zones. “The capacity of many cooperatives remains weak and insufficient to become true linkage hubs,” he analyzed.

To address these issues, the Ministry’s leadership proposed 4 strategic directions: First, to strongly reform administrative procedures and support mechanisms to create a transparent, efficient environment focusing on value chain effectiveness. In additional, develop digital and green value chains, promoting traceability, digital governance, emission reduction, and carbon credits.

He also called for reorganizing production around standardized, transparent raw material zones with coded plantation areas and digital maps. Finally, to build a professional linkage advisory ecosystem that tightly connects production, market, contracting, and chain operation.

Deputy Minister Vo Van Hung described this shift as a transition from “administrative support” to “development facilitation”, with a culture of cooperation as its foundation. “Value chain linkage is not only a production method, but also a symbol of trust and integration readiness for Vietnamese farmers, cooperatives, and enterprises", he concluded.