Viet Nam establishes environmental index to rank agricultural cooperatives

Clearly depicting the business environment landscape for agricultural cooperatives

The Agency for Cooperative Economics and Rural Development under the Ministry of Agriculture and Environment is collaborating with the Institute for Strategy and Policy of Agricultural and Environmental (ISPAE) to finalize the Provincial Competitiveness and Governance Index (PCGI). This effort follows two years of research and a pilot program in seven provinces, with a plan for nationwide implementation starting in 2026.

At a consultation workshop held on November 27, Mr. Le Duc Thinh, Director of the Department for Cooperative Economics and Rural Development, emphasized that developing the PCGI is a "strategic task" assigned by the Government under Resolution 106/NQ-CP on developing the collective economy and agricultural cooperatives within the context of sectoral restructuring. He asserted that this is not merely a technical requirement but also a "political responsibility of the agricultural sector" to develop an accurate tool that reflects the quality of local administration in the collective economy, a sector vital to farmers and sustainable development.

According to Mr. Thinh, the PCGI aims to form a "policy mirror," helping each province clearly identify its position, strengths, weaknesses, and necessary improvements, thereby ensuring cooperatives receive effective support. He noted that a favorable business environment for cooperatives serves as a measure of local authorities' commitment to the collective economy. This commitment is evidenced by resource allocation, proactive support, the quality of public services and infrastructure, transparency, the ability to connect cooperatives with businesses and banks, and especially the administration's attitude when cooperatives face difficulties.

When the environment is favorable, cooperatives can scale up, farmers' incomes rise, and the agricultural sector gains the conditions for green transition and sustainable growth. Conversely, policy hurdles can cause cooperatives to stagnate, even with numerous support programs in place.

Mr. Thinh suggested that annual evaluations and ranking publications would spur reform and foster healthy competition among provinces, similar to the role of the Provincial Competitiveness Index (PCI) in the business environment. However, to make the index fully operational, continued refinement is necessary for three key areas: the rationale of the structure, which comprises nine components and 48 indicators; the methodology for data collection and verification; and the roadmap for announcing results in a way that simultaneously drives reform and maintains a constructive approach with local authorities.

Ms. Ta Thu Trang, from the Information and Agricultural and Environmental Services Center, explained that the PCGI is designed to reflect two-way impacts: the cooperative's internal capacity and the quality of the local support environment. The index was developed based on the reality that current evaluation tools like the PCI and DDCI primarily focus on private enterprises. In contrast, agricultural cooperatives operate on a distinct model, linked to thousands of small-scale production households and heavily influenced by local institutions.

Pilot results from Son La, Hung Yen, Nghe An, Binh Dinh, Lam Dong, Dong Nai, and Dong Thap demonstrated the PCGI's ability to provide a relatively clear picture of the cooperative business environment. Some provinces scored positively on internal indicators such as financial transparency, service capacity, and value chain linkages, while groups related to infrastructure, logistics, access to capital, and the quality of public services remained low.

Based on the pilot findings, the research team proposed streamlining the PCGI structure for easier use, increasing the weight of direct feedback from cooperatives, adding indicators on digital transformation, the green economy, and climate adaptation, and standardizing data collection and processing, while expanding electronic surveys.

Ensuring scientific rigor and transparency for national implementation

From a technical evaluation standpoint, Mr. Dinh Tuan Minh, a representative of Viet Analytics, the consulting unit that developed the PCGI methodology, stated that the index will only succeed if it ensures "scientific rigor, transparency, and comparability among localities." The 2026 PCGI will implement a seven-step process, ranging from finalizing the tool and training local staff to collecting primary and secondary data and standardizing and ranking on a 0-100 scale.

Mr. Minh noted that the biggest challenge lies in data quality. The response rate from cooperatives varies across provinces; the synthesis capacity of some Departments of Agriculture and Environment remains limited; administrative data lacks an independent cross-referencing mechanism; and direct surveys in areas with inadequate technology infrastructure can lead to inaccuracies. He argued that the PCGI would only become a valuable national index when the data provision process is standardized, electronic surveys are expanded, and the central data system is completed.

Dr. Nguyen Anh Phong, Deputy Director of the ISPAE, stressed that for the PCGI to become a trustworthy national index, the implementation mechanism must be inter-sectoral, unified, and clearly defined.

Mr. Phong announced that the first year of national implementation (2026) will serve as a "system capacity test," with a survey scope covering approximately 9,000 cooperatives across 34 provinces.

"If we execute this well, the PCGI will not just be a benchmark but also a mechanism for continuous learning and improvement, helping agricultural cooperatives develop more effectively, efficiently, and sustainably," Mr. Phong emphasized.

An online dashboard will be activated to monitor the real-time response rate and assist localities in resolving issues. After the data is cleaned, coded, and scored, the Ministry of Agriculture and Environment anticipates releasing the national results in early 2027.

Nevertheless, challenges persist due to uneven data quality from the provinces, limited synthesis capacity among local officials, and a lack of alignment between administrative databases and primary data collected from cooperatives. Expanding the survey on a national scale also places significant pressure on the investigation teams and technical infrastructure.

To address these issues, he recommended accelerating the digitization of the entire process, expanding online surveys, increasing the role of research and consulting units in data standardization, and issuing technical guidelines from the outset to ensure uniform implementation across all provinces.