Those of us in the dairy sector are currently starting to think about getting into processing to try and get a bit better share of the pie. Trouble is the pie isn't all that big to start with so how much better can we do? There's also only 22000 of us at the last count so buying into or building plants is going to be pretty expensive for each of us. We do have to try something though. I have read somewhere that there are 350000 farmers in Britain. I can't really believe it myself but then I've also heard recently there are 50000 firemen and I couldn't believe that either. So if, for example, we could organise these 350000 of us into chipping in perhaps £3 per day to a big pot that would be about £1000000 a day more or less. You could call this big pot a co-op, plc or whatever you like. I don't know how much these thing cost but it surly wouldn't be many days or weeks before we had enough to buy or build our first supermarket. Then before too long a second etc. You may, or may not, want to borrow money to speed thing up I don't know. Now I haven't checked there are this many of us to chip in, it would take a hell of a lot of organising, everybody would need to do their bit and we would need to be clever enough to surmount all the "unfair competition" unfairness, I say unfairness rather than rules because these rules only seem to apply on a patchwork basis, though always to farmers. Probably plenty of people have already thought of something like this and dismissed it after looking into it, but is it better just to get into retailing than risk a lot of money in processing and possible just end up getting shafted yet again. If you sell the produce at the farm gate let somebody else process it and you step back in to retail it aren't you in a better position than growing it processing it and then still having to deal with a supermarket. If , very big if, it could work it would benefit all farming sectors too. Dose anybody have any idea how many farmers there actually are?

Not as many as there were a couple of years ago. If you look at the figures for sheep farmers there are probably less than 60,000 in the British Isles. An interesting figure recently from the RPA propaganda machine that they had paid 95% of SAPS payments or 26,000 producers, what they neglected to say was that this was only England. It is not the cost of setting up processing plants but having sufficient capital to keep them running. Am I wrong in thinking that there is plenty of processing capacity already from companies that have already failed recently?

I understand what your saying but if you got money off every farmer in the UK for this idea then in return the farmer would expect you to buy the produce off them at a good price. Your going to need one big supermarket to put all their produce up for sale. You'd be better off buying up a chain of supermarket like Aldi and changing the image, but I doubt you would get every farmer in the country to give you £3!

Blue, I like the idea of Plan B and it is good to see someone thinking positively, but I’m afraid that we all probably underestimate the scale of the retail industry relative to the UK farming sector. Tesco’s turnover is 23 billion pounds, UK Agriculture, perhaps 7 billion. The EU contribution is 3 billion. You may be right about 350,000 people but that would be the number involved in farming – including both farmers and employees. If you could indeed get them all to put in £3 each day, and raised one million pounds a day, it would take 38 years to save up as much as Tesco is worth today. At the other end of the scale, you could have outbid the Coop for the Alldays chain from the receivers after five months, but you might have needed to keep raising more money to cover for its ongoing losses. Express Dairies or Robert Wiseman would cost between one and seven months to buy, depending on whether you quietly bought up the shares or bought out the assets at their value.

Any venture into processing must closely examine the effect of existing processors undercutting any new entrants. I'm not sure this has been recognised. If I had a significant share of the UK liquid milk processing industry and a group of farmers built a brand new multi-million pound plant. I could probably undercut them for a considerable time as my plant is already written-off, and I know what I'm doing. Processing ventures are not the panacea many think they are, there are some successes but it's high risk.

Worms and everybody, we do need an accurate number of farmers yes. From what you say is Tesco worth just under £14 Billion? Is this figure the value or the shares on the Stock Market? Dose this figure include value investors put in the company from an expectation of massive profits forever? How much would it cost to buy the land and the big shiny buildings, putting aside the value of the established business? "Express Dairies or Robert Wiseman would cost between one and seven months to buy." I was trying to think of a way of avoiding getting into processing, we could hardly use the £3 off an arable, sheep, pig, etc., etc., farmer to fund buying dairies or any of the money off a dairy farmer to buy a mill or slaughter house. I was thinking about just leapfrogging all the problems and risks of processing and going straight for where the money is. Even if each farming sector bought enough processing to handle all their own product we would still have the problem of imports, and supermarkets are slippery customers. I can see how us owning supermarkets, even if it was difficult to get this thing going, would benefit me in milk. Could others see how it may benefit them from their perspective? Regards.

With the 7 billion at farmgate price.What would that be worth after everyone in the middle has added on their mark up.

The rough figure of £14billion for Tesco appears to hold true for both market capitalisation and underlying asset value. Using similar data sources would give Safeway market cap at £2.4billion against assets of £5billion. The £7billion for UK agriculture is actually contribution to the UK economy rather than a directly comparable turnover. The point, though, was to highlight the vast scale of these companies.

How about plan C. Just 1% of 350000 ie 3500 could bring every supermarket and catering depot to a standstill for a few hours and get an immediate result. Pig farmers recently got talking to the big boys and have made progress but a reminder will occur if progress falters.

You seem to have some good figures to play with. Safeway seems the better bet if you were buying of the shelf, so to speak. £2.4 billion for £5 billion of assets. Its also more attractive than Tesco, the one's I've seen look a better class setup, ideal for the first time buyer. I was thinking about that £7 Billion figure you mentioned. How much are our assets worth altogether? If we could get a loan guaranteed against a small portion of our value what sort of clout would that give us? How much debt do these supermarkets carry? Is anybody tempted at all by this proposition?

What about the £28 million [+ interest]in Tel Aviv? Taxpayers money

I don’t follow the Tel Aviv reference… Total net assets of UK farming amount to just over 100 billion pounds (total assets worth 112 billion and 9 billion of liabilities – DEFRA figures for 2000) I think the figures I quoted were net assets so the debt was already taken off the total asset value.

Thanks for the figures. That value you gave for Safeway, wouldn't it only take 5 or 6 years to payback a loan to cover a controlling interest, provided we could get the £1million per day? Surprising what we could do if we were organised! Found this last night. http://partner3.multexinvestor.co.uk/editorial/EditorialContent.asp?edid=FED120021030&ticker=SFW.L&country=GB&mxid=100050641&companyName=SAFEWAY+PLC

Since I own a handful of shares in Safeway, I am well aware of their position. Any concerted bid would raise the share price so I would be delighted if you put the consortium together! More seriously, you are right – any group making a concerted effort to buy into the business could wield great influence. It wouldn’t need to be a controlling interest and the money might be better spent aiming for 5% of each of the big three supermarkets listed on the London market. This would cost about £1.2bn at today’s prices - about a third of the annual EU support to British farms and should yield £48 million return per annum to redistribute. All the supermarkets claim a lot under their corporate responsibility programmes and support organisations promoting fair trade and environmental concern in agriculture. How much influence do these organisations exert on the supermarkets? And do they use this influence?

Dame Shirley Porter (Tescos)[allegedly] owes Westminster City Council 28 million squid for jerrymandering local elections. Last seen in Tel Aviv...

All this perhaps seems crazy, but might it be crazy enough to work? My consoritium of 1 isn't going have a great affect on your shares just yet I'm affraid. Very nice to see the words "supermarkets", "corporate responsibility" and "fair trade" used in the same sentance. A first for me. I wonder if the farmers unions are looking for a Master Plan to sell. This ones going free to a good home.

A great idea!But if you do buy into a supermarket then where do your prorities lie when it comes to making a profit, do you return a high dividend from your shares in the supermarket and to do this you must try and buy cheaply or do you pay the farmer more for his produce making the supermarket uncompetative and therby returning a lower dividend, Why not try and have a better working relationship with the supermarket chains instead of constantly berating them, after all they are one of your biggest customers. Most of the comments that I have read on this forum are very critical of Lord Haskins who is only trying to do the same as every farmer in the country, make a profit and if by doing so it means driving the price down or buying from overseas, again he is only doing the same as most farmers would do, how many U.K. farmers drive a British car, have a British tractor or use all British feed for their cows and British fertiliser on their paddocks, out of those that do (and there won't be many) have they never tried to screw the last few pounds out of the feed/fertiliser rep. If plan B does come together and farmers manage to form some sort of cooperative it will need a good management team to run it, would Lord Haskins not make the ideal Chairman?

Good question. You would need to pay extra for the produce to benefit the farmer unless we as farmers bought all the shares in all the supermarkets, an expensive and unnecessary way of proceeding. Though I am not talking about ruining the supermarkets just running them so everybody benefits. Before we proceeded to far with this plan we may well find a better relationship with the supermarkets becomes a strong possibility as they see us marshalling our troops. I don't think I have berated them, they have control over us and use it as you would expect, I am just suggesting we take some control for ourselves. I have to say I can't quite see Haskins as chairman. It would need to be somebody widely respected and trusted, Haskins being neither. I myself am not even convinced that you could call Haskins a good business man. He's spent a decade or more undermining first the MMB then Milk Marque and of course the milk price. In the end his own companies lost value and well, did he jump or was he pushed? Regards Blue.

I think there are about 275,000 farmers, 150,000 full time on 233,000 registered holdings. The big difference is that we don't co-operate with each other here and we suffer for it, our farmgate milk prices are 15% lower than the rest of EU and the only real difference is the proportion sold through co-ops; the shop price here is 15% higher and the only real difference is the consolidated retail sector. As a nation we are very good at finding reasons why we should not do something, especially when the decision has to be made in a meeting or by a committee (a place where a good idea is taken to be suffocated) rather than just getting on and doing it. We wouldn't even have to buy any processing / retailing capacity, just negotiate from a united position. You just have to look at the unity of the firemen to see what that attitude can achieve. I know it's not the whole answer, but who is it that says 'Every little helps?'