17 November 2000

Bringing some Scottish clout to grain market

By Shelley Wright

Scotland correspondent

A NEW farmer-controlled business, which aims to handle a third of Scotlands grain within five years, was launched this week.

United Cereals of Scotland, which chairman, John Drysdale, hoped would be "the marketing revolution I have dreamed about", aims to give farmers some clout in a market that is becoming increasingly international.

Mr Drysdale, who grows about 1800ha (4448 acres) of cereals at Kilrie, Kirkcaldy, and is also chairman of Tayforth Grain, said farmers had always been price takers and were divided and ruled by both merchants and consumers.

"To me the way the market is organised is not sustainable," he told journalists on Monday, ahead of a series of farmer-recruitment meetings in Inverness, Aberdeen, Perth and Kelso.

"We have small, weak co-ops and very powerful merchants. This harvest highlighted to me how massively inefficient we are at achieving any sort of strength. We must supply quality, service, and a commodity that is as uniform as possible.

"We need large co-ops to compete with large grain companies so we can be taken seriously on a world market stage."

United Cereals of Scotland will be farmer-controlled, although initially it will have only two shareholders – Aberdeenshire-based co-op North Eastern Farmers, and United Oilseeds. Both have invested £150,000 each to establish the new business, with managing directors of the two, Brian Hutchison and Martin Farrow, sharing that role in the new venture.

Mr Farrow said: "Farmers do not need to be putting money into someone elses pocket, they need to keep as much of it as they can. So a farmer-controlled business is the right way to go. The only way to compete with big buyers is to be a big seller, and that is what we intend to be."

Five of Scotlands largest grain groups have already committed their crops to the new organisation: North Eastern Farmers, Aberdeen Grain, Highland Grain, East of Scotland Farmers and Tayforth Grain.

Mr Farrow said the initial target for next year would be for United Cereals to handle about 400,000t of Scotlands annual 2m tonne plus harvest, rising to a third of the Scottish harvest – 750,000t – in five years. Only 15% of Scottish grain is traded through farmer-controlled businesses.

United Cereals will operate five grain pools on a fixed rate commission of £1.80/t for those who commit a minimum of 200t, or all their grain if they have less than 200t. &#42