One Commune One Product in Viet Nam
01/08/2022 ,
Highlight
- The One Commune One Product (OCOP) programme is implemented nationally in Viet Nam as a rural economic development strategy since 2018, by building on the provincial initiatives and the experiences from Japan and Thailand. It is a key program for rural economic development in the direction of promoting and adding value to internal resources, which is an important solution and a task in the implementation of the National Target Program on building new rural areas (NTP) for the period 2021-2025. NTP aims to build new rural areas in depth, efficiency and sustainability.
- The OCOP products in Viet Nam are mostly food and beverage items. They are assessed and graded for a set of criteria on products and community strength, marketing ability, and product quality. Currently, there are 8 478 OCOP products rated with 3 stars or more. The OCOP producers, more than 60 percent of them are cooperatives and SMEs, can know their product level relative to others, which creates an environment to learn from each other and improve their products.
- The programme plans to promote more green products, high-quality and high-value products, while strengthening marketing and promotion of OCOP products.
Background
Viet Nam is a large country with the population of 98 million, of which rural population accounts for 61.95 percent in 2021.1 Rural economic development is a key agenda of the government, as rural-urban inequality has not narrowed down and rural people migrate to urban areas in search of high-wage employment. For example, in 2018, a person in rural area earns only 53 percent of a person in urban area.2
In Viet Nam, the One Commune One Product (OCOP) programme has been implemented at the provincial level since 2013, started in Quang Ninh province in the Northeastern part of the country, by adopting the concept from Japan and Thailand. In 2018, the national government decided to implement OCOP across the country, by the Prime Minister’s Decision No. No. 490/QD-TTg, in order to increase rural income, create more jobs, promote human resource development and preserve diverse culture. The OCOP programme aims to promote the use of internal resources, such as local wisdom, creativity, human resource, raw materials and local culture, increase product values and raise income of rural residents.
Specifically, the purpose of the Vietnamese OCOP programme are as follows:
- Encouraging rural production and business owners to fully utilize the potential of land, products and comparative advantages to improve product values, increase income and contribute to improving living standards in rural areas;
- Re-organizing production through whole value chain and linkage with raw material production areas, applying advanced quality standards, promoting startups and creativity in rural areas to enhance value addition and sustainable development; and
- Addressing employment, social security, reducing poverty and raising incomes for people in rural areas as well as preserve local culture.
Problem statement/Key issues
To achieve equitable and inclusive growth throughout the country, rural economic development is necessary.
Solutions
Introduce a national initiative to promote local economic development by adopting the One Village One Product (OVOP) approach, which has been implemented at the provincial level since 2013.
Key initiatives/process
The One Commune One Product (OCOP) programme in Viet Nam focuses on developing the value chain of specialties and traditional products, which promote and take advantage of cultural values, local raw materials, production conditions, among others. Such products include processed items associated with local raw materials, cultural and indigenous knowledge, with value addition, as well as traditional crafts and rural tourism. To do so, the programme provides training to the OCOP producers, in the areas such as business and organizational management, product development with innovative and creative ideas, production skills, quality management, food safety, packaging and labelling, intellectual property, traceability along the value chain and marketing.
In order to encourage the producers to improve the quality of their products, the OCOP products are evaluated and rated into five categories, following the Thai OTOP model. The evaluation criteria are as follows:
- Part A (products and community strength: 35 points) covers production organization, product development, and community strength;
- Part B (Marketing ability: 25 points) covers marketing and product story; and
- Part C (Product quality; 40 points) covers sensory criteria, nutrition, uniqueness of products, product standards, ability to export and distribute in international markets economic.
Based on the scores, each product is classified as follows: 5-star (90–100 points); 4-star (70–89 points); 3-star (50–69 points); 2-star (30–49 points); and 1-star (less than 30 points). The first assessment takes place at the district level. All related documents of the products with the scores of 50 points and above (3 stars and above) are transferred to the provincial level, which in turn determines the 3-star and 4-star products. The decisions for 5-star products are made at the OCOP product evaluation council at the central level, chaired by the Deputy Minister of Ministry of Agriculture and Rural Development (MARD).
Classification of the OCOP products is not the end. Supervision and inspection of the products are conducted even after that, especially in terms of food quality and safety. In addition, the products are reviewed and evaluated after the expiration of the accreditation period so that the producers will continue to supply their products in good quality.
Marketing and promotion are important to realize economic gains by the OCOP producers. Various forums, exhibitions, OCOP Week event, awarding event, among others, have been organized, both at the provincial and national levels, to connect the producers and with customers and to introduce unique cultural values behind the products locally, nationally and internationally. Tourist centres and cultural activities are also utilized as marketing channels. Adding to such physical events, live stream events have been also organized and broadcasted to connect the producers and consumers. In addition, measures are implemented to improve logistics systems, to promote domestic trade and export.
Impact
Now, the OCOP programme has been implemented in all 63 provinces of Viet Nam. As of August 2022, 8 478 OCOP products have been rated with 3 stars or more, including 20 5-star products. Of which, 3-star items account for 65.4 percent. In terms of product categories, food and beverage items are predominant, accounting for the 80.8 percent and 6.9 percent respectively. The remaining portion includes herbal products, garment and handicrafts.
The OCOP producers are now more than 4 351, consisting of cooperatives (38.3 percent) and small and medium-scale enterprises (SMEs; 26.1 percent). The rest are individual businesses and households. More than 60 percent of the OCOP producers who received 3 starts or higher have registered their annual revenue increment by 17.6 percent on average. Employment is also increased.
Economic and social development has been realized. For example, in Phu Thanh commune in Lac Thuy district of Hoa Binh province, traditional small-scale poultry farming has become a more productive industry with higher quality and value added. The whole value chain is upgraded, by taking measures from production to marketing. Various government measures such as developing mechanisms and policies to support and develop livestock for enterprises, business households and cooperatives through poverty reduction programmes, new rural construction, agricultural extension, among others, have been utilized, along with the efforts by the farmers and private businesses. Compared to 2015, by 2020, the total number of poultry farms in Hoa Binh province increased to 71, inclement by 24.6 percent. With nine chicken farming cooperatives, during the same period, the total number of commercial poultry flocks per laying hen for poultry increased by 36.7 percent, and the number of breeding and egg-laying poultry increased by 31.4 percent. Breeders raise not only broilers but also indigenous chicken breeds such as Lac Son chicken and Lac Thuy chicken, which are endemic and rare with delicious meat quality. One of the cooperatives supply inputs and marketing channels to 7 000 member households, each of them raise about 5 000–7 000 chicken on average. The cooperative supplies about 10 000 chickens per day to the market, sold at VND 85 000–90 000/kg (USD 3.6–3.9). Member households earn a profit of VND 40–50 million (USD 1 720–2 150) per 1 000 chicken.
During 2018–2020, the country successfully raised nearly USD 1 billion to implement the OCOP programme, of which the government budgets accounted for only 2.7 percent. Private sector and businesses have effectively driven the OCOP activities.
From 2021 to 2025, the OCOP programme in Viet Nam plans to promote more green products, high-quality and high-value products. In addition, the programme will strengthen marketing and promotion of OCOP products.
Good practices/lessons
The OCOP programme in Viet Nam is clearly instituted as a key component in the National Target Program on New Rural Development, which is the government’s primary strategy for rural development. It enables convergence of various interventions from different government institutions, both at the national and local levels.
The OCOP programme targets village-and-commune-level SMEs and cooperatives who develop unique, specialized products. As the programme is operated synchronously and nationwide, it is creating spillover effects in the community, and promoting the entrepreneurial spirit, responsibility and capacity of the producers, through taking advantage of local specialities such as wisdom, culture and raw materials.
Developing OCOP products along with culture dissemination by exemplifying the endogenous value and characteristics can effectively promote and introduce the local, regional and national culture to the other part of the country and beyond the country.
The OCOP program focuses on improving the product quality and market accessibility in order to meet consumers' demands for unique, traditional, quality products with traceability, and fully exploit the large market of Viet Nam and eventually the international markets.
As the number of products increase in the market, competition has become intense. The producers need to improve their marketing mind, as to selecting their target customers strategically as well as designing, producing and presenting their products to deliver values to their customers and consumers, with differentiation from competitors.
Key resources
Vietnam’s “One Commune, One Product” Program
https://www.fao.org/3/cb5641en/cb5641en.pdf
One Commune One Product website (Vietnamese only)
https://ocop.mard.gov.vn/
Hoa Binh develops broiler farming in the direction of OCOP products (Vietnamese only) https://ocop.mard.gov.vn/Pages/hoa-binh-phat-trien-chan-nuoi-ga-thit-theo-huong-san-pham-ocop.aspx
Building OCOP from the leader who brought the product to sell (Vietnamese only)
https://ocop.mard.gov.vn/Pages/xay-dung-ocop-tu-viec-chinh-nguoi-lanh-dao-mang-san-pham-di-ban.aspx
For more information
Responsible ministry/institution:
Division of One Commune One Product (OCOP), National Coordination Office of the National Target Program on New Rural Development (NCO).