VIETNAM ACADEMY OF SOCIAL SCIENCES GRADUATE ACADEMY OF SOCIAL SCIENCES NGUYEN THI THUY LINKAGE BETWEEN FIRMS AND FARMERS IN FARMING DEVELOPMENT IN THAI BINH PROVINCE IN INTERNATIONAL INTEGRATION CONTEXT Major: Economic development Code: 31 01 05 SUMMARY OF ECONOMIC DOCTORAL THESIS Ha Noi – 2019 Thesis is completed at: Graduate Academy of Social Sciences Supervisor: Dr Tran Ngoc Ngoan Prof Dr Nguyen Van Song Master Reviewer 1:………………………………………… Master Reviewer 2:………………………………………… Master Reviewer 3:………………………………………… The thesis will be denfended at the Doctoral dissertation council in the Graduate Academy of Social Sciences at ….day… month… year 2019 Thesis can be found at: - Library Graduate Academy of Social Sciences - National Library, Hanoi, Vietnam INTRODUCTION The urgency of the subject Vietnam is gifted with various advantages in agricultural production, and its agricultural products are of high economic value With the rural population of "60.8 million, accounting for 64.9% of the total population" (GSO, 2017) Our country has a variety of export items to countries in the region and around the world such as rice, coffee, pepper, cashew and tea, etc In 2018, GDP increased by 7.08%, specifically, agriculture, forestry and fishery sectors reached a significant growth with a rise of 3.67% (GSO, 2018) Vietnam is a member of the ASEAN Economic Community (AEC), successfully negotiates the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and joins AFTA, etc By taking part in the international integration these, Vietnam has been given with a great number of new opportunities: increasing volume of goods consumption, facilitating attraction of foreign direct and indirect investment, promoting better economic development to efficiently exploiting its economic potentials, strengthening the trend of global integration and enhancing socio-economic life Thai Binh has a special geographical position (the only plain province that isn't surrounded by hills and mountains) Especially, with its main strengths in the farming sector, the average food output is over "1 million tons / year, rice productivity in 2017 reached over 59.4 quintals / / year" (GSO, 2017) , Thai Binh province particularly pays big attention to linkage models in rice production and consumption as commodity for residents Specifically, Thai Binh keeps maintaining a pilot model based on the linkage of enterprisebusiness household-farmer and the linkage of enterprise-cooperative-farmer, in which firms play a pivotal role However, farming development in Thai Binh is still monoculture and in fragmented type, facing various difficulties including “commodity production still at a low level, fragmented and small-scale production status, lack of capital, traditional farming practices, lack of production experience, failure of forming a stable and sustainable economic development model, especially backward processing and storage.” Therefore, in order to overcome limitations, challenges and obstacles to comprehensively develop the agricultural economy as well as to the farming sector with the orientation of international integration, it is necessary to establish and strengthen such linkages It has to be done to achieve large value of goods, high-quality goods with brands to meet demands in international integration, participating in the regional and global development network Therefore, promoting linkage in farming development proves to be necessary in the current period in our country as well as in Thai Binh province From the above considerations, I have chosen the topic "linkage between firms and farmers in farming development in Thai Binh Province in the context of international integration" as my research topic Objectives of the thesis topic a General objective The general objective of the thesis is to find certain solutions and proposals to promote the linkage between firms and farmers in farming development in Thai Binh Province in the context of international integration b Specific objective Firstly: systematizing and clarifying theoretical and practical basis regarding the linkage between firms and farmers in the context of international integration Secondly: Assessing the situation and factors affecting the linkage between firms and farming households in farming development in Thai Binh Province in the context of international integration Thirdly: proposing certain solutions to promote the linkage between firms and farmers in farming development in Thai Binh Province in the context of international integration Object and scope of the study - Research subject of the thesis: Theoretical, practical issues and current situation of the linkage between firms and farmers in farming development in the context of international integration - Research scope: + Scope of location: districts and communes engaged in agricultural production (mainly farming) in Thai Binh province + Scope of time: Within the research scope, the PhD candidate only focuses on solving theoretical and practical issues to propose solutions to promote the linkage between firms and farmers in farming development in Thai Binh Province in the period of 2010-2018 and development orientation of farming sector in Thai Binh province until 2025 Research Methodology Approach: The thesis uses certain approaches: system approach, policy approach, history approach, sustainable development approach to study the linkage between firms and farmers in farming development in Thai Binh Province in the context of international integration Research method:: To solve research tasks, the thesis uses a number of specific methods including: (1) Qualitative research method, quantitative research method; (2) method of descriptive statistics and (3) General method of economic analysis New scientific contributions of the thesis (1) What is the actual situation of the linkage between firms and farmers in farming development in Thai Binh Province ? What is the mechanism for linkage implementation (2) What are the benefits of the participants in the linkage process? (3) In the context of “international integration” today, what role does the linkage play? 4) What are main methods of linkage between firms and farmers in the farming sector in Thai Binh Province? (5) What factors can influence participation in the linkage between firms and farmers in the farming industry? How much those factors influence? (6) What measures need to be taken to strengthen the linkage between firms and farmers in the farming sector in Thai Binh Province in the coming time? Theoretical and practical significance of the thesis 6.1 Scientific significance - The thesis theoretically clarifies the linkage between firms and farmers in farming development in the context of international integration In the context of integration, how will it impact agricultural development? The thesis systematizes and clarifies the nature of linkage between firms and farmers in farming development in the context of integration - The thesis analyzes and assesses inadequacies and factors affecting the linkage between firms and farmers in farming development The thesis also presents points of view, objective certainty, role and develops criteria for finding evaluation 6.2 Practical significance - The thesis uses qualitative research and quantitative survey findings to analyze and make assessments on the situation of linkage between firms and farmers in farming development in Thai Binh Province in the context of integration - Based on those evaluation criteria as well as findings on causes of limitations and shortcomings upon implementing the linkage between firms and farmers in farming development in Thai Binh Province in the context of international integration - Based on theoretical and practical analysis, the thesis proposes certain solutions to promote linkage between firms and farmers in farming development to meet demands upon international integration of the agriculture throughout the country and in Thai Binh province in the coming time - The thesis is also a significant information channel for policy makers, managers, departments and divisions in Thai Binh province, advisory agencies, socio-economic research organizations and for personal reference Structure of the thesis In addition to the preface, the thesis's conclusion consists of chapters: Chapter 1: Literature review Chapter 2: Theoretical and practical bases on linkages, linkages between firms and farmers in international integration Chapter 3: Current Situation of Firm And Farmer Linkage, Factors Affecting Firm And Farmer Linkage In Development OfThai Binh Farming Industry In International Intergration Context Chapter 4: Some solutions to enhance effective linkages between firms and farmers in farming development in Thai Binh province in integration context CHAPTER 1: LITERATURE REVIEW 1.1 Foreign situation of research: a A Linkage and cooperation between firms and farmers (contract farming) Western economists assume that “economic linkage is an objective and inevitable phenomenon and is a form of market administration under capitalism that minimizes transaction costs The theory on transaction costs of firms associated with the theory on contractual relationship is part of the newly established theory on new institutional economics in the US ”, mentioned by Coase (1960), Demsetz (1964) , William (1985), and Kleinet al (1978) argue that: "In a market economy, institutional improvements will lead to cost reduction" b Vertical land horizontal linkages “Vertical linkage is based primarily on transactional relationships but also includes voluntary assistance or transfer of resources and technology to local partners” (Pack and Saggi, 1997; Saggi, 1999) “Horizontal linkage relates to cooperative arrangements between foreign and domestic firms in the form of joint ventures and networking between firms” (Pack and Saggi, 1999; Saggi, 2002; Giroud and Scott- Kennel, 2006) c Context International economic integration is an inevitable development trend of the global economy in the current period Especially, it is significantly impacted by the 4.0 industrial revolution The phrase "hội nhập quốc tế”" in Vietnamese rooted from foreign languages ( "international integration" in English and "intégration internationale" in French) This concept is mainly used in the fields of international politics and economics 1.2 Domestic situation of research: a Research works related to production linkage through contract Economic linkage through contract is the most basic form “Since the Prime Minister's Decision No 80/2002 / QD-TTg dated June 24, 2002, a number of agricultural products such as rice, coffee, sugarcane, sugar, seafood and pork have been sold by sales contracts"(Nguyen Thi Quynh Hoa, 2005), or" a contract between sugar-cane manufacter and sugar-cane company"(Ngo Thi Thuy, 2004) However, these topics have not yet shown specific findings of the linkage results achieved by farm households linked to firms “The linkage between farm households and state-owned firms is the strength to facilitate the economic development in farming At the same time, a favorable economic environment will be created to develop the market-oriented commodity economy However, this research has not shown the real benefits of the parties involved in the linkage yet ”(Tran Van Hieu, 2005) b Research works related to linkage forms Linkage means in produce consumption of farm households is construed as “the form existing and developed of cooperative relationships between farm households and other agricultural production, processing and trading entities in order to save time, costs and achieve greater efficiency in agricultural production and business, enhance competitiveness, share capabilities and open new agricultural markets in certain conditions"(Ho Que Hau, 2012) c Research works related to economic linkage “Economic linkage in the market economy and economic integration is the initiative in awareness and implementation of objective economic linkages among economic entities in the social economy in order to implement the relation of labor division and cooperation to achieve common socio-economic benefits”(Ho Que Hau, 2012) Therefore, "economic linkage is an objective category that reflects the coordination relations between production and business entities in order to save time, costs and achieve greater efficiency in production and trading of agricultural products, enhance competitiveness, share capabilities and open new markets ”(Vu Duc Hanh, 2015) e Context According to Pham Quoc Tru (2011): “International integration is construed as the process of countries carrying out activities to strengthen their linkage with each other based on their common benefits, goals, values and sources and power (decision-making authority) and compliance with general rules within the framework of international institutions or organizations ” He said: “The subject of international integration is all of the nations; the main subjects of international relations have full competence and capacity to negotiate, sign and implement international commitments Besides those main subjects, the other entities form a combined force to participate in the process of international integration ” Nguyen Van Song (2009): “Joining integration, especially after entering the WTO, we must adapt to direct changes in terms of prices, and types of crisis from markets and world situations Chapter 2: THEORETICAL AND PRACTICAL BASES ON LINKAGES, LINKAGES BETWEEN firms AND FARMERS IN INTERNATIONAL INTEGRATION 2.1 Agriculture and linkage issues in agricultural development 2.1.1 Some concepts 2.1.1.1 Concept of farm household Frank Ellis, the University of Cambridge (1988), defined: “Farm households are those working in agriculture, making their own livelihoods on their lands, mainly using their own family labor in production, usually belonging to the larger economic system, but being primarily characterized by local participation of markets and operational tendency with a high degree of imperfection.” 2.1.1.3 Concept of farming industry Farming is an important industry in agriculture Farming industry can provide food for humans, feed for cattle and poultry and raw materials for industry, but also its products are also used for export 2.1.1.4 Concept of linkages and economic linkages The link originates from "Intergration" which economically means "unity, coordination or merger of many parts into one whole" The old-era authors called the same as"Intergration", but as "linkage" by the new-era ones (Nguyen Nhu Y, 1999) According to Be’la Balassa (1961), "Economic linkages are closely understood as the institutional cohesion between economic organizations and economies." 2.1.1.5 Concept of enterprise and farmer linkages According to Ho Que Hau (2012): The linkages between firms and farmers is a part of economic linkage, in which the parties involved in are firms and farmers who implement certain constraints to stabilize and improve economic efficiency According to Eaton, Charles and Andrew (2001): Contractual agriculture is an agreement between farmers and firms based on the principle of future binding: price, quantity, and term 2.1.2 Content on business and farmer linkage in production and development 2.1.2.1 Regarding forms of agreement a A Oral contract (Unofficial contract) An oral contract is a compromise between parties not in writing The parties can discuss, exchange and reach agreement on certain issues by themselves Despite this, oral contracts are also agreed by the parties on "quantity, quality, price, time and place of delivery" This type of contract is based on the belief and credibility among the contractual parties According to Le Xuan Sinh (2013): “The linkage between farm households and agribusinesses is mainly done through contract and agreement The legality of this contract is doubtful, the responsibility for contract performance is loose Most oral contracts between businesses and farm households lack binding terms, just as a memorandum of understanding between the parties They have not been an economic contract yet" b Contractual linkage (Cooperative linkage between businesses and farmers) According to Eaton and Shepherd (2001) "Contract farming is an agreement between farmers and processing businesses or firms trading in production and provision of agricultural products based on future delivery agreements in which prices are pre-determined According to Sykuta and Parcell (2003) "Contract farming in agriculture sets out the rules for the allocation of three main elements: benefits, risks and decision-making power" 2.1.2.2 Regarding the linkage expression a A Vertical linkages Vertical linkage is a form between entities and economic actors at different levels According to Gulati et al (2007): “Farmers can join a vertical linkage by participating in the value chain, and vice versa being consumers of the output of firms Such linkage is to ensure the quantity and quality of product as well as the harvesting time managed and monitored for the best benefits to the participants ” According to Bijman, Jos and Meike Wollni (2009): "Linkage is a solution to control food safety" As reported by the World Bank (2007): “Many organizations perceive that contract farming is one of the main solutions to link farmers and markets at home and abroad, thereby contributing to poverty reduction.” “Vertical linkage is based primarily on transactional relationships but also includes voluntary assistance or transfer of resources and technology to local partners” (Pack and Saggi, 1997; Saggi, 1999) b Horizontal linkages “Horizontal linkage relates to cooperative arrangements between foreign and domestic firms in the form of joint ventures and networking between firms” (Pack and Saggi, 1999; Saggi, 2002; Giroud and Scott Kennel, 2006) Or "horizontal linkage shows the interaction between foreign and local firms in the production of goods and services in the same production stage" (Unctad, 2001) The authors also "distinguish the linkages and their effects The most important effect is called the spillover effect, arising as a side effect from the actions of foreign firms to the domestic economy ”(Coe and Helpman, 1995; Coe et al, 1997; Giroud and Scott-Kennel, 2006; Dieppe and Mutl, 2013) And the linkage is seen as a direct mechanism for spillover effects to take place In a research by Stockbrige et al (2003): “Cooperation between farmers for production communities have helped them to have better negotiation ability in input purchasing as well as market information accessing” Horizontal linkage can be done in forms with increasing levels: mutual-aid team, cooperative groups and cooperatives c Mixed linkages According to Rome Lazzarini, S.G (2008): “It is a linkage included vertical and horizontal linkages This form appears in the process of development and integration when the relationship between households, establishments and production and business firms is a combination of cooperation and competition These units, on the one hand, associate horizontally with each other to form teams, or cooperatives for the better competition among them, for limiting price squeeze On the other hand, those teams or cooperatives vertically link with processing firms, or are suppliers of products for the next actor in the production and business process.” Figure 2.1: Relationship between components in a link chain Firstly, “there must be a system of legal documents and institutional organizations for the chain." Secondly, "there must have agents to form the management of all linkages" Thirdly, "such linkage will contribute to increasing the scale"." Fourthly, "there must be good communication to create awareness in the social community, especially in the producer and consumer community." Fifthly, "authorities from central to local levels must have consensus on support in and formation of linkages." 2.2.3 Factors affecting the formation of firm and farmer linkages for farming development in integration context 2.2.3.1 Internal factors a Awareness factor b Production resource factor c Motive for linkage d Linkage capacity 2.2.3.2 External factors a Market factor b Regulatory environment c Integration context 2.2.4 Analytical and evaluative indicators of firm and farmer linkage process 2.2.4.1 Reflective indicators of results of firm and farmer linkages - Area, productivity and output of crops grown in the area - Value of farming products in the area -Quantity of products consumed of farm households in the area - Selling prices of farming products in the area 2.2.4.2 Reflective indicators of linkage situation and results of firm and farmer linkage in the farming industry - Percentage of firms and farmers participating in the linkage - Volume of input supplies and raw materials supported through the linkages - Volume of products consumed through the linkages - Product selling price through the linkages - Number of firms and households violating the linkage content 11 2.2.4.3 Reflective indicators of impact of linkage participation - Selling price before and after linkage participation - Stability in production before and after linkage participation - Income of farm households before and after linkage participation - Value of exported goods 2.3 Practical experience and lessons for Thai Binh province 2.3.1 A number of policies related to firm and farmer linkages The Party and the State have issued many guidelines, orientations, strategies and policies to promote agricultural development, such as Resolution No 26-NQ/TW, dated August 5, 2008, on "agriculture., farmers and rural areas ", Decision No 80/2002/QD-TTg, dated June 24, 2002 of the Prime Minister on "policies to encourage the contractual sale of commodity farm produce", Directive No 25/2008 / CT-TTg, dated August 25, 2008 of the Prime Minister on "strengthening the direction of consuming agricultural products through contracts" 2.3.2.1 Experiences from China Firstly, firms apply a management model: firms + standard livestock farms + farmers and build a stable and reliable partnership with farmers They conduct separate livestock and provide unified services to contracted farmers including provision of breeders and feed, technical assistance and disease prevention Secondly, cooperative model between farmers and firms is mainly applied in three aspects: (2) circulation of agricultural land, (2) construction of infrastructure and (3) expansion of science and technology in agriculture Thirdly, in recent years, firms as agricultural product processors, have followed the path of agricultural modernization and effort development of large scale, standard, intensive farmming and green materials Stable raw material production and increase in farmers' income are achieved by forming a linkage with farmers Thence, it is possible to establish the Association of Farmers and Specialized Cooperatives Fourthly, Farming contracts are operated by firms in three forms: (i) leasing to farmers to operate themselves in large quantities and executing contracts with them, (ii) executing contracts with village committees and (iii) executing contract with farmers on their own thing 2.3.2.2 Experiences from Thailand Contract farming is a fairly successful integration model in agricultural production in Thailand The form of contract is quite diverse and it all comes 12 from the actual demands of processing firms Among them, the linkage value chain of rice is the most typical The Thai rice value chain has the following characteristics: “(1) small farms must sell paddy to traders, (2) farms directly link with exporters or traders of supply, (3) brokers play an important role in connecting between processing plants and distributors, (4) private firms directly participate in export: exports focus on a number of particular private firms, (5) the government only interferes with the purchase of rice at the minimum price, not too deeply into the market” 2.3.3 Domestic experiences 2.3.3.1 Experience from "a large sample field" in An Giang To improve the efficiency of the rice production chain, An Giang province has built a large sample field according to the 4H motto (Cooperation Modern - Harmony - Effectiveness) - Collaboration is required: “Farmers in the region are gathered into cooperative groups or involved in cooperatives Cooperative groups or involved in cooperatives act as intermediaries, representing farmers to execute contracts on production and consumption linkage with firms; guiding farmers to produce according to plans and providing services for production and consumption." -Modern is required: "modern scientific advances and information technology must be applied to production and distribution The recommended technical process, production diary record are also applied” - Environmental harmony and friendliness are required: “Participants must be assured of harmonious interests of society and avoid damage to third parties Attention should be paid to environmental protection such as waste disposal, protection of ecosystems, etc according to the principles of safety for producers, consumers and the environment." - Effectiveness is required: "Consumption firms have specific product strategies and stable consumer markets The State performs well the management role, supports in many aspects of the mechanism, policies and implementation environment ” Accordingly, firms and farm households in An Giang have established new types of cooperatives with higher economic efficiency (Nguyen Van Xuan, 2016) Experiences from Dong Thap province Linkage in production and consumption is the key to help Dong Thap successfully implement the rice production value chain Before linkage, the consumption completely depends on the purchasing market, on the price at the time of purchase, sometime leading to devaluation that makes farmers worry However, since joining the linkage model under "large sample fields", farmers 13 may completely keep their mind on their production Because agricultural products and rice has been committed by firms to pay off at a stable price Tam Nong district of Dong Thap province has successfully implemented this model 2.3.3.3 Experiences from Ninh Binh province From the success of Ninh Binh in linkages between firms and farmers in processing agricultural products, it can be acquired the forms of linkages in Ninh Binh province: (1) Nuclear estate linkage: “The basic feature of this linkage is that the product buyer is an firm owning or using the land or plantation and the seller is a dependent farmer, only producing to create products and reselling them to the firms (2) Multipartite or 4-house linkage: “This is a form of contract on agricultural production and product consumption involving many different entities such as the State, scientists, firms, cooperatives, farm households (3) Intermediary linkage: “This linkage is usually suitable for small and medium-sized companies with limited human resources and scattered material areas The form of intermediary linkage is shown in the linkage of production and consumption of edible mushrooms between mushroom production households and Huong Nam firm through cooperatives in Yen Khanh district, Ninh Binh province (4) Informal linkage: “This is the main form of linkage through oral agreement between production farm households with collectors or collecting agents or small processing facilities 2.3.4 Lesson on firm and farmer linkage inThai Binh province Firstly, “The State plays an important role in linking agricultural product consumption of households, not only in encouraging but also deepening into the organization and coordination of forces in the linkage models with participation of farm households and other entities Secondly, “Practices of Thailand, China… all highly appreciate the role of centralized form, center core form and intermediary form through cooperatives in linking farm product consumption of farm households." Thirdly, “The economic linkage will actually grow when it is linked to the market development, and the processing technology industry, at the same time, the development of processing firms will give rise to the inevitable demand for economic linkage between farm households and export processing firms, typically for rice, cotton, sugarcane and seafood products in Vietnam" 14 Fourthly, “The mode of economic linkage between farm households and actors is done mainly through contracts, which is legal basis for binding linkage-evolving entities to performance of their responsibility and benefits in the spirit of self-awareness and respect" Chapter 3: CURRENT SITUATION OF FIRM AND FARMER LINKAGE, FACTORS AFFECTING FIRM AND FARMER LINKAGE IN DEVELOPMENT OF THAI BINH FARMING INDUSTRY IN INTERNATIONAL INTEGRATION CONTEXT 3.1 Situation of farming development and process of forming firm and farmer linkage in Thai Binh province 3.1.1 Overview of Thai Binh province Thai Binh is a coastal province in the Red River Delta Thai Binh borders five provinces and cities: Hai Duong in the North, Hung Yen in the Northwest, Hai Phong in the Northeast, Ha Nam in the West, Nam Dinh in the West and Southwest, and the South China Sea in the East (Gulf of Tonkin) According to the economic development plan, Thai Binh belongs to the northern coastal region ”(Open source Encyclopedia Dictionary) 3.1.2 Assessment of advantages and disadvantages of Thai Binh province and factors affecting the linkage between firms and farmers 3.1.2.1 Advantage assessment of Thai Binh province Firstly, Thai Binh has advantages in topography, land and climate Secondly, Thai Binh is a province with a fast and synchronous pace of mechanization in agriculture Thirdly, the priority policies on agricultural development of the province and districts have achieved unexpected results in recent years 3.1.2.2 Disadvantages and obstacles Firstly: Farmers in Thai Binh still have maintained habits and thinking about spontaneous production Secondly: There are still many obstacles in the process of agricultural land accumulation Thirdly: There are many issues regarding the work of verifying, amending and adjusting the plans for agricultural development in Thai Binh that have not been overcome Fourthly, restructuring the economy and rural labor towards reducing the proportion of agricultural sector and of agricultural labor remains slow 3.1.2.3 Factors affecting the linkage between firms and farmers in Thai Binh a Internal factor 15 - Awareness factor + Awareness of farmers + Awareness of firms - Motive for linkage b External factors - Market factor - Regulatory environment - Integration context 3.2 Current situation of firm and farmer linkage for farming development in Thai Binh province in recent time 3.2.1 Process of developing and forming the firm and farmer linkage for farming development in Thai Binh province Agricultural production in Thai Binh develops quite comprehensively, positively changes by the commodity production model and maximally exploits the potential and advantages of the delta province and the intensive farming tradition “The average 5-year agricultural, forestry and fishery production value (in the 2013-2017 period) increases by 3.3%/year; in which: farming increases by 0.76% per year on average, livestock by 5.54% per year and aquaculture by 6.2% per year”(Thai Binh Statistical Office, 2017) The process of industrialization and modernization of agriculture and rural areas has been increasingly strengthened; the facilities, infrastructure, science and technology have been applied better in production, and the technology has been improved 3.2.2 Assessment of factors affecting level of firm and farmer linkage for farming development in Thai Binh province in international integration context 3.2.2.1 Descriptive statistical analysis of current situation of firm and farmer linkage for farming development in Thai Binh province in international integration context In fact, when participating in the linkage, firms will conduct discussions and democratic agreements with farmers Financial resources are public, profits and risks are shared 3.2.2.2 Assessment of reliability of scale The verification and evaluation of the scale is carried out in steps: Step is to perform Cronbach’s Alpha analysis to eliminate the observed variables 16 not contributing to the description of the concept with a need of measure; the second step is to conduct exploratory factor analysis (EFA) to check the validity of scale of study concepts Cronbach’s Alpha Analysis Cronbach’s Alpha analysis results for the observed variables are described in the following table: Based on the results of scale verification, it can be shown that most of the scales have Cronbach Alpha coefficient in the range of 0.7-0.8 so the scales in this study are highly reliable Results in the above table also indicates that there are observed variables NT04, MTCS05, GC03 excluded because they fail to meet the condition of Cronbach Alpha coefficients and total correlation between variables Exploratory factor analysis EFA After assessing the reliability of scales, the author conducted an exploratory factor analysis EFA to evaluate the convergent and discriminant validity of scales Factor analysis for independent factors Five factors were drawn from the implementation of the EFA analysis: “(1) Commitments to and sharing of benefits and risks between farmers and firms in the integration process, (2) Household awareness on the benefits from linkage with the firms, (3) Policy environment - Institutions related to firm and farmer linkage, (4) Issues related to management skills management and business capacity of linked firms, (5) Price issues interested by farmers in the process of linking with firms” Thus, the results of exploratory factor analysis EFA have changed a bit in comparison with the initial qualitative research findings From the regression model findings, it can be derived the multiple regression equation expressing the relationship between the independent and dependent variables as follows: Y= 2.102 + 0.732X1 + 0.091X2 + 0.231X3 + 0.222X4 + 0.281X5 Where: Y is the dependent variable representing the level of participation of farm households in the process of linking with firms The variable Y assesses the level of household participation in linkage with firms It is built on levels: interest and willingness to participate X1, X2, X3, X4, X5 are independent variables in the following order: “(1) Commitments to and sharing of benefits and risks between farmers and firms in the integration process, (2) Household awareness on the benefits from linkage with the firms, (3) Policy environment - Institutions related to firm and 17 farmer linkage, (4) Issues related to management skills management and business capacity of linked firms, (5) Price issues interested by farmers in the process of linking with firms” 3.2.3 Assessment of current situation in the implementation of firm and farmer linkage for farming development in Thai Binh province 3.2.3.1 Assessment of advantages and disadvantages in the process production linkage performance: a Advantages: Firstly, agricultural production in Thai Binh develops quite comprehensively, maximizing the region's strengths Secondly, land accumulation in Thai Binh brings high economic efficiency Thirdly, in the development structure of farming industry, Thai Binh has focused on the production of food crops (especially rice), whose process has been specialized Fourthly: The survey results show that Thai Binh farmers are very interested in the benefits to farming output products, willing to participate in the linkage due to realized benefits from such linkage Fifthly, the policy environment in Thai Binh is considered democratic Sixthly: The regression model findings show that factors that farmers are most interested in the process of linkage are: “Commitments to and sharing of benefits and risks between farmers and firms." b Disadvantages: Firstly, the production status is small and fragmented Especially in the process of production investment, there are also a number of disputes between firms and farmers due to the lack of harmony on benefits and the implementation of contractual commitments between firms and farmers is negligent, leading to contract breakage as a popular reality Secondly, the large sample field area in the linkage-participating areas in Thai Binh is small Main characteristic is highly-productive rice Thirdly, with coastal terrain, Thai Binh is a province greatly affected by climate change, extreme weather and saline intrusion The weather is often complicated; pests and natural disasters often occur during the production process Therefore, investment funding in production is almost completely lost Fourthly, the market and market orientation for production and development of the farming industry are still insufficient and weak, very few firms invest in developing closed agricultural production, including from 18 production to product consumption stages New farming products are only consumed as materials for raw processing and for other localities, etc 3.2.2.2 Lesson on firm and farmer linkage from farming development in Thai Binh province The above results are derived from Thai Binh's timely awareness and the involvement of provincial local authorities, mass organizations and farmers in the production linkage to create value added and develop sustainably Infrastructure for agricultural production is completed step by step to facilitate the development of "commodity production", mechanization is promoted and applied in farming production; idea of large-scale commodity production is formed and from the situation of some difficult areas in farming production, there are more and more forms of land accumulation to organize production effectively Moreover, Thai Binh has many advantages in terms of land, climate and intensive farming compared to other provinces in the RRD, so many firms inside and outside the province want to invest in production with farmers However, there are still some obstacles such as: linkage in production and product consumption is not really sustainable, the area of linked fields is small due to the semengted production area Although there are advantage in rice and vegetables production and many good quality products but due to the output is mainly in the raw and unprocessed form, their value remains low The number of farming-business firms is still low in both scale and quantity Chapter 4:SOME SOLUTIONS TO ENHANCE EFFECTIVE LINKAGES BETWEEN firms AND FARMERS IN farming development IN THAI BINH PROVINCE IN INTEGRATION CONTEXT 4.1 Current international and domestic context The influential competition between big countries burdens countries in the region, especially small- and medium-sized countries, with the great pressure that forces them to adjust policies appropriately Therefore, many countries are facing challenges both internally and externally Competition among major countries also partly affects the results of cooperation, dialogue and solidarity in ASEAN 4.2 Perspectives and goals on firm and farmer linkage in farming development in Thai Binh province in the coming time Developing "high-tech agriculture" is one of new breakthrough directions of agriculture determined to be implemented by Thai Binh province in 2017 This is an inevitable trend to improve the quality of agricultural products and 19 plays an important role in restructuring the industry towards large-scale commodity agriculture Despite being initialed, investment in "hi-tech agriculture" in Thai Binh is a "golden land" for many agribusiness firms 4.3 Some solutions to enhance effective linkages between firms and farmers in farming development in Thai Binh province in integration context 4.3.1 Some solutions to improve the policy environment and linkagerelated institutions mainly focusing on the process of land accumulation in agricultural production Firstly, review of and supplements to the agricultural and rural, concentrated areas and land accumulation planning are paid attention to Secondly, the leaders of the Department of Agriculture and Rural Development of Thai Binh province need to have drastic direction in focusing and accumulating agricultural land to convert to commodity production Thirdly, cooperation with organizations, firms and research institutes is promoted to attract and call for investment in rural agriculture development in Thai Binh province Fourthly, specific mechanisms and policies for firms and corporation with high-focused and high-tech agricultural production projects investing in rural agriculture development in Thai Binh province are reviewed and promulgated Fifthly, administrative procedures to facilitate firms' investment in rural agriculture development in Thai Binh province are reviewed and simplified 4.3.2 Solutions to improve management skills and business capacity of linked firms There should be contracts including clear constraints and severe sanctions to be executed with farm households Improving business capacity of firms will promote effective business processes and improve productivity and economic value for firms 4.3.3 Solutions to raise farm households' awareness on benefits from linkage with firms For a closed linkage, sustainable and long-term development, in the future, some solutions need to be focused on to raise the farm households' awareness on benefits from linkage participation 4.3.4 Solutions to promote development of value added chain model Horizontal linkages are promoted 20 Vertical linkages are promoted Brands for products in the value chain are built and developed 4.3.4 Some solutions to develop production linkages Firstly, "propagation and mobilization" of localities for implementation of the new policy as concentrating agricultural land, applying science and technology, and organizing the formation and development of the province's farming industry production under a linkage chain are maintained Secondly, organizations and individuals inside and outside the province are attracted to invest in the production, processing and consumption of agricultural products Thirdly, the form of production and development under the model of linkage chain is promoted; provincial farmers are encouraged to develop economy under the model of cooperatives and the formation of cooperative groups and associations which produce under a linkage chain from the supply of input materials, agricultural production process, business process, processing, preservation and consumption of products, is mobilized Fourthly, the policies issued by the Government and the provincial People's Committee should be implemented in a synchronized and proper manner, especially the policy of supporting capital sources, helping firms, organizations, individuals and farm households access loans for investment in agricultural development under a linkage chain 4.3.5 Some key solutions to develop agricultural cooperatives under the 2012 Cooperative law in the coming time Firstly, propagation and mobilization of the 2012 Cooperative Law and documents related to are continued to each district, commune and locality in the province Secondly, training in the management and professional capacity for agricultural cooperative management officials for each specific title is strengthened Thirdly, local governments need to have mechanisms and policies to expand and improve the quality of agricultural cooperatives services, with a focus on centralized input supply services and centralized product consumption services Fourthly, in the period of 2017-2020, "an effective cooperative model is organized and developed" according to the 2012 Cooperatives Law in association with production and consumption of products along the value chain 21 Fifthly, it is necessary to implement central support and provincial support mechanisms for the development of agricultural cooperatives Sixth, market for agricultural products needs to be developed strongly Trade promotion activities and market development for agricultural products with the aim of improving the quality, prestige and competitiveness of products are carried out 4.3.6 Some solutions to develop production linkages Firstly, "propagation and mobilization" of localities for implementation of the new policy as concentrating agricultural land, applying science and technology are carried out Secondly, organizations and individuals inside and outside the province are attracted to invest in the production, processing and consumption of agricultural products Thirdly, the form of production and development under the model of linkage chain is promoted; provincial farmers are encouraged to develop economy under the model of cooperatives and the formation of cooperative groups Fourthly, the policies issued by the Government and the provincial People's Committee should be implemented in a synchronized and proper manner 4.3.7 Solutions to develop markets for agricultural commodities is promoted for a stable and sustainable development of firm and farm household linkage 4.4 Proposals and recommendations 4.4.1 Regarding agricultural land accumulation and concentration - It is proposed that the Ministry of Agriculture and Rural Development should consult with ministries and branches to submit amendments and supplements to a number of contents of the Land Law to the National Assembly for facilitation of land accumulation and concentration - It is proposed that the Ministry of Agriculture and Rural Development should introduce, attract or invite investment from agribusiness firms at home and abroad in Thai Binh province - There are separate policies to support Thai Binh in piloting models of large-scale land accumulation 4.4.2 Regarding cooperatives - With specific characteristics of agricultural cooperatives transformed from old ones, the Government should have separate decrees for this type of cooperative or amend the Decree 193 to add a separate chapter for agricultural 22 cooperatives: “Participants , forms of capital contribution, model of organization, management, production and business activities, service administration of agricultural cooperatives, financial management, income distribution in agricultural cooperatives " - It is proposed that the Government should offer additional funding for agricultural cooperatives under the Prime Minister's Decision 2261/QD-TTg - It is proposed that the Ministry of Agriculture and Rural Development should advise the Government to remove regulations on the rate of supply, consumption of products, services and employment 4.4.3 Regarding development and linkage of production - It is proposed that the Ministry of Agriculture and Rural Development should submit amendments to regulation and new mechanisms and policies to support the development of the province's agriculture sector to the Government - It is proposed that the Ministry of Agriculture and Rural Development should introduce and invite firms inside and outside the province to invest in Thai Binh agriculture so that Thai Binh has the opportunity to attract "investment in developing agricultural production along the value chain" 23 CONCLUSION The linkage between firms and farmers in the development of farming production is an essential issue that the agricultural sector of Thai Binh Province needs to implement in the current context The reason is that only the new linkage helps farming development, integration and competition with countries in the region and around the world Linkage helps firms and farmers gain significant benefits, farmers focus their mind on production without fear of ways consuming goods, price squeeze by traders or "season of devaluation" On the side of firms, they will also have a stable input supply, a closed production process without a worry about stagnation or sufficiency of input materials Development of linkages between firms and farmers in the farming development in Thai Binh province has achieved remarkable results Thence, it helps the life of farmers in Thai Binh gradually be improved and assured Labor productivity is increased, farming products are more diversified 24 LISTS OF AUTHOR'S PUBLIC WORKS No Work name Linkage in agricultural development between farm households and firms in the context of international economic integration Analysis of agriculture role in Vietnam's economy Place of publication Journal of the Asia-Pacific Economy, December 2015, No 458 Journal of Socio-Economic Information and Forecasting, Ministry of Planning and Investment, No 136, April 2017 Some solutions to enhance FDI Journal of Economy and attraction in revolution 4.0 Forecasting, No 07, March 2018 Current situation of firm and farmer linkage in farming development in Journal of Economy and Thai Binh province Forecasting, January 2018 Factors affecting linkage between firms and farmers for farming Journal of Economy and development in Thai Binh province Forecasting, February 2018 ... chain h tế kin hiệ p Thị trường ờn g ng i trư h ao ật gi thu ển ỹ uy - k Ch học oa D n oa kh quố c tế Thị trường đầu Mô Ph ức ch tổ t c lự u n g n x dâ ăn s ng N nô đầu vào Sản xuất nông nghiệp. .. period Especially, it is significantly impacted by the 4.0 industrial revolution The phrase "hội nhập quốc tế? ??" in Vietnamese rooted from foreign languages ( "international integration" in English... opportunities: increasing volume of goods consumption, facilitating attraction of foreign direct and indirect investment, promoting better economic development to efficiently exploiting its economic