16 July 1999

All-Welsh co-op seeking 15%+ livestock sign-up

By Robert Davies

A NEW all-Wales marketing co-op expects to sign up at least 15% of Welsh livestock farmers in the next year.

Supporters aim to persuade a minimum of 2000 producers to invest and commit stock in the first year and trading could start in the autumn. They believe that the farming crisis is deep enough to obliterate memories of past livestock co-op failures.

Launching the initiative, Alun Michael, the Welsh Assemblys first secretary, said it had the total backing of the Assembly and the Welsh Development Agency, which jointly paid the £17,000 cost of printing and mailing prospectuses to 15,600 producers.

"Farmers need a bigger stake in the supply chain," said Mr Michael. "The co-op will be a vehicle for them to make downstream investments. It will complement existing local promotional initiatives and the livestock markets."

The WDA will fund the drafting of a business plan and marketing strategy. The co-ops backers claim it will increase producers negotiating powers in the market place, and give them the chance to benefit from value-adding processing.

To sell though the group farmers will have to buy a shareholding of £75 a farm. They must also make one-off payments of 60p a breeding ewe and £6 a finished beef animal committed to the group in their first year of membership.

The idea of an all-Wales farmer owned co-op was proposed by the Welsh Agri-food Partnerships red meat working group. Huw Thomas, the Meat and Livestock Commissions Wales manager, who has been evaluating producer reaction, admitted that there was opposition from auctioneers and some producers (see Stock and Sales, page 36).

"But most farmers see that a successful co-op can bring great marketing benefits, and provide the only real chance of entering into partnerships with other food industry operators. Livestock producers have already secured their futures in many other countries, including New Zealand, Sweden and France, by co-operating in farmer controlled businesses."

John Lloyd Jones, chairman of the working group, said experienced and well-qualified marketing people would negotiate on behalf of members. A database of information on the numbers, breeds, weight ranges and farm assurance status of a large number of animals would help this.

He also emphasised that the co-op could take advantage of EU structural funds to give its members some share of the value added to their products beyond the farm gate.

"It will enable farmers to join together to invest in processing their own products, turning a commodity into a branded product."

Commercial reality would prevail. The co-op offered a long-term opportunity of success, not a quick fix for the ills of the livestock industry, he added. &#42