Tuy Loan: a cooperative in Vietnam that also is a classroom, what do they teach?

Tuy Loan is a vegetable cooperative in Vietnam that, after 5 years of working to professionalise its operations and improve access to markets, has succeeded in increasing the income of its farmers and the quality of its vegetables. From supplying only one food store, it now supplies high-quality vegetables to several supermarkets and stores in Da Nang, Vietnam. In this article, our colleague Nguyen Thi Den tells us how they did it.

‘I have had a good experience working with the Tuy Loan Safe Vegetable Production and Consumption Cooperative for five years. I got to appreciate what we rarely experience when working in the social project management sector – radical changes in the production methods, business management and, in the case of this farmer organisation, even the diversifying of its business model into eco-tourism.

When I started working with them in 2017, Rikolto initiated a partnership with Da Nang Plantation and Plant Protection Department, aiming at improving the production and business management of the cooperative which was having 22 members at that time.

Tuy Loan cooperative is located in Hoa Phong, a rural commune in the Da Nang district of the South Central Coast region of Vietnam. The production area was four hectares. As part of the Lien Thanh cooperative union, they supplied only one food store with seasonal vegetables.

Together with the cooperative’s board of directors, we evaluated the level of professional expertise in the farmer organisations.

For this, we used SCOPE, a tool designed to assess the performance of producer organisations. SCOPE assessments measure several aspects, ranging from internal and financial management skills to business expertise and access to finance. In this case, the areas of internal management, financial management, operations and sustainability needed to be addressed.

Once we understood the scope of the cooperative’s challenges, we provided support through training, so that the cooperative would become a reliable service provider to its members and consequently a reliable supplier of quality products to its market.

We organised activities to reinforce the business management, marketing and administration skills of the management board, supplying technical support and monitoring the production and packaging processes.

Based on the SCOPE Insight Assessment scores covering 2018 to 2021, Tuy Loan has achieved an impressive improvement with regard to internal management (from 3.3 to 4.1), financial management (from 3 to 4.6), sustainability (from 3 to 4.1) and operations (from 3.5 to 4.5).

We also work with them on piloting a Participatory Guarantee System (PGS), a low-cost, locally based system of quality assurance with a strong emphasis on social control and knowledge building. It is a simple but effective participatory certification system that involves a wide range of stakeholders such as farmers, consumers, retailers, NGOs and local authorities in agricultural products’ quality assurance.

To obtain a PGS organic certification, farmers are not allowed to use any chemical fertiliser or plant protection product, except for extraordinary use as per the PGS Organic standard.

In June 2022, Tuy Loan Cooperative's operation expanded, doubling the production area and its active members.

On average, 35 tons of vegetables are produced per month and the cooperative has assisted approximately 73,000 people in accessing safe vegetables. In addition, by applying PGS the cooperative’s products achieved the VietGAP and One Commune One Product (OCOP) Programme certifications.

Revenues increased for the cooperative from USD50,000 p.a. in 2018 to USD191,304 p.a. in 2021. For the farmer-members, their average income increased from USD217 per month in 2018 to USD283 per month in 2022.

Currently, the cooperative is supplying supermarkets and safe food stores in Da Nang city, such as Ba Na Hill, Winmart in Da Nang, Co.opmart, Big C, the prestigious Sky-Line International School, Hoa Tho Trade Center and 12 other smaller stores.

Diversifying the business model: Let's bring the young people to the farm!

The location also brings an additional opportunity identified in the cooperative’s business model. The cooperative is situated off the national highway close to a village of traditional artisans which already attracts tourists.

Every year, the cooperative organises on-site visits and experiential tours for some 5,000 students to learn about the cooperative, its facilities and the production gardens

Young people can experience first-hand how vegetables are produced safely and sustainably, and how they are nurtured and harvested.

The programme has had a positive response from schools and travel agencies. According to Bui Dung, Director of Tuy Loan Cooperative. “Eco-tourism has helped the cooperative to diversify its income, enabling the members to invest and increase production of high-quality produce.”

“These guided tours have provided us with a connection with schools, families and potential customers; they know what we do and where our brand and the quality of our products are positioned.” Mr. Bui Dung, Director of Tuy Loan Cooperative

What does the future hold?

In Rikolto, we believe that a more professional farmer organisation is one with more tools and skills to access the market. Tuy Loan embodies this statement.

In June 2022, the cooperative participated in a conference on “Connecting Da Nang Products to the Urban Distribution System 2022”, organised by the Da Nang Department of Industry and Trade. At the event, the cooperative signed a memorandum of understanding with Non-Nuoc Stone Carving Cooperative and An Hai Dong General Business Cooperative to supply them with vegetables.

According to Mr. Bui Dung, in order to develop business relationships, it is important for PGS-compliant cooperatives like Tuy Loan to promote communication, particularly in mass media such as newspapers and television, to help businesses and consumers in Da Nang to have a better understanding of PGS and its benefits, because the concept is quite new to them.

For the immediate future, Tuy Loan Cooperative will continue to apply PGS and actively take part in programmes promoting trade, fairs and exhibitions, to develop its brand visibility and market access as an integral part of the urban food supply chain.’