Last updated: Thursday, May 23, 2013
Linking Suburban Craft VillagesPosted: Wednesday, April 04, 2012
Each year, Hanoi spends a lot on craft village development. However, the operation of craft villages is very inefficient, facing the risk of “erosion”.
According to an analysis by Mr Alain Chevalier, a French craft village researcher, the suburb of Hanoi is home to craft villages including various types namely: lacquer, ceramic, porcelain, wood carving, weaving, and embroidery. Hanoi has developed and approved the project “Conservation and development of craft villages in Hanoi” for the period 2010-2015 with the total value of VND3,620 billion.
There are currently 1,270 craft villages in Hanoi, accounting for 62 percent of the villages in the country, concentrating in some rural districts such as: Phu Xuyen (125 villages), Thuong Tin (120 villages), Chuong My (174 villages), Ung Hoa (113 villages)…The craft villages have contributed to creating jobs for 627,000 workers with average income of VND700,000/person/month.
Since the implementation of conservation and development of craft village project in Hanoi for the last 2 years, due to the economic crisis, the number of employees has decreased substantially in 100 percent of surveyed villages. Considerable decline can be clearly seen in a number of villages including Phu Vinh rattan and bamboo village, Ha Thai lacquer village with an increase of 30 percent and 20 percent respectively Production materials become more scarce and unit prices get higher while it’s the selling price of products launched in the world markets nearly keep no change, which has driven the production businesses’ profit too low.
Mr Nguyen Van Sinh, President of Van Phuc silk village association, said in 2011, total silk products in the village of Van Phuc silk were consumed at about over 2 million meters, which accounted for only one third of consumption volume three years ago. Meanwhile, the main ingredient in the silk production is silkworm which is very scarce due to no material planning on the large scale. The quality of silk is low due to backward equipment. Therefore, up to 40 percent of weaving machines in Van Phuc village are in unused condition and during the past 2 years, as many as 30 percent of households in the village have given up silk businesses-Mr Sinh complained.
Representative of Department of Economic Cooperation and Rural Development, MARD also reiterated that in the context of integration under the pressure of urbanization rate and contracted land, surburban craft villages have been facing with many challenges. Production space is limited and population density in the village is often crowded. Therefore, the living space is simuteaneously used as production space, which cause great pollution to the living environment, especially in lacquer and silk villages. In addition, most craft villages meet difficulties in accessing capital. The current source of villages’capital is mainly bank loan, relatives and a part from (including advances from the purchasers). The bank loan is often accompanied by high interest rate and cubersome procedures. The interest rate of bank loan was up to 20 percent in 2010 and is currently fluctuating around 20 percent. Businesses still meet difficulties in production scale expansion reinvestment.
Associating might work?
Facts have shown that rural economy which is closely connected with the agriculture exposes many limitations. Farmers in rural areas cannot get rich on their land despite huge efforts made. Craft villages will give them new means of subsistence right on their land. They will not be unemployed or have to leave their homeland to earn a living.
As such, Mr Vu Quoc Tuan, Chairman of Vietnamese Craft Village Association, believes that comprehensive solutions and macro policies are needed for the development of craft villages. Craft villages need to unite together in order to form production bases and strong enterprises within their areas. Mr Tuan thinks that macro policies are of great importance. The government’s policies and fund often give more focus on large enterprises, especially state owned ones while paying less attention to small ones and craft villages.
In the time to come, in addition to improving the function and expanding operation scale of the credit fund which is currently operating in 11 localities), it is necessary to establish another funding channel for rural areas. It will serve as a middleman who helps to connect enterprises with banks and a “representative” for enterprises in getting loans from banks. “Social organizations like Farmers’ Association and Women’s Association… also need to improve their roles so as to help farmers get credit to maintain production. Only until the government pays more attention to the small private economic sector at craft villages via its open policies, easily-approached credit source, trade promotion assistance, vocational training support and environmental anti-pollution solutions, etc., can craft villages achieve comprehensive development,” shares Mr Tuan.
It is known that during this difficult period, in many localities, enterprises have implemented a lot of effective “self-help solutions”, i.e. to cooperate in seeking for consumption markets of products. Mr Ta Hoang Linh, Deputy Head of Trade Promotion Department under Ministry of Trade and Industry, says that a number of enterprises on the outskirts of Hanoi which specialize in producing ceramics, wooden, bamboo and rattan products, etc. have shared orders to help each other maintain production. However, this type of cooperation requires that these enterprises have to assure quality and models of products as committed and sign contracts to secure benefits of involved parties. A cooperation form being implemented is to collaborate in production stages, which helps to reduce production cost remarkably. Another popular collaboration method is to support each other with capital via many forms. A lot of enterprises advance capital for their satellite enterprises to conduct production without having to pay interest.
Also according to Mr Linh, craft villages need to unite to protect and develop production while avoiding sacrifice, unhealthy competition for market or lowering reputation of one another. In a broader view, they need establish craft village groups to support each village exchange information, market, trade promotion and production and business management methods.
On the other hand, we are aware that craft villages and the agriculture have an organic relationship. After harvesting season, farmers often make craft products to earn income. Nowadays, having less land to cultivate and seeing that craft making generates inadequate income, they tend to seek for jobs at industrial parks where they can have higher income. Meanwhile, the industry has not met all the demand for employment, which forces farmers to leave their countryside for urban areas to find jobs and thereby creates a disorder and instability for the rural areas. Therefore, cooperation for the development of craft villages on the outskirts and craft villages, in general is a boost helping to maintain the model of craft villages and farm work while keeping farmers stay and work in their homeland, as stated by expert Nguyen Do Anh Tuan, Director of Agricultural and Rural Policies Consulting Center.