21 June 2002

Trust behind sales of inputs

MOST arable inputs are still bought on trust, a new Deloitte and Touche survey has found.

But farmers have changed their allegiance from the friendly farm rep to reliable groups and organisations, says the firms Richard Crane.

The survey was based on responses from 450 RASE members, all with some arable acreage. "Throughout all the commodities they buy, 60-70% of farmers only went out to quote to one or two people. This underlines a very strong relationship with the supplier."

Mr Crane is unsure whether this level of trust was unfounded. He identified much secrecy surrounding pricing. "Theres a lot of smoke and mirrors – we need more transparency."

But he is surprised that well over half of farmers use buying groups. "Selling organisations differentiate themselves as much on service and trust as they always did. Farmers clearly believe that groups, many of them farmer-owned, are more transparent and generate trust."

Three-quarters of inputs are bought over the phone, with just 20% of sales agreed face-to-face. This suggests farmers are more willing to deal with an organisation than an individual. "Farmers buy from relatively few people, so to get that business requires a considerable level of trust."

Agronomists help with arable inputs on three-quarters of farms. Half are consulted strategically, with the grower making most decisions. &#42