Collective Action: Make it Work Better for the Poor

M4P Markets and Development Bulletin (MDB) No. 9

The rural sector in Viet Nam is particularly significant in terms of poverty reduction. The agricultural sector accounts for over 70 percent of the employment in the country, and the vast majority of the poor are located in rural areas. While the agricultural sector will inevitably modernize and commercialize, the bulk of agricultural production in the foreseeable future will continue to be undertaken by smallholders. Given this context, organizing small farmers through collective action is important in Viet Nam. By working together, small farmers can increase their purchasing power to access better supplies and equipment and realize higher profits through increased economies of scale during production.

In order for collective action to be effective - especially in regards to improving the livelihoods of the poor - a number of "keys to success" are necessary. While the current debate about collective action's effectiveness tends to center around the legal form of the group, research undertaken by the Making Markets Work Better for the Poor (M4P) project suggests that the factors behind collective action's effectiveness are more related to a group's internal governance and market orientation rather than to its legal form. Recommendations for improving a collective action group's "keys to success" include increasing the capacity of its members and leadership and increasing the legal recognition of multiple forms of such groups.

Avaiulable for download (English and Vietnamese) at http://www.markets4poor.org/?name=publication&op=viewDetailNews&id=387