20 March 1998

Working together solution to most of farmings problems

MOST of farmings current problems could be solved if farmers were prepared to work together in very large groups, according to speakers at a Royal Bath and West conference.

Exeter University economist Martin Turner noted farmings declining contribution to the national economy and the rise of consumer power which had allowed a few retailers to get very big. Group action was the answer.

Robin Pooley, chairman of Pseedco and a director of Porcofram and North Country Primestock, was also keen on collective action. "Switched-on British farmers do it together", should be the slogan, he suggested.

A group, if big enough, could hire the best staff in the world to deal with market research and sales, input costs, finance, agronomy, and risk management. "Why whinge about the power of supermarkets when we could have equal or greater power?" he asked.

"If the big five international grain companies get together to fix market prices that is a serious criminal offence and they can go to jail. If we farmers do that we get exemption from the restrictive trade practices act, exemption from corporation tax, exemption from local business rates, capital grants, training and marketing grants, and a round of applause from MAFF."

Malcolm Shepherd, managing director of Wessex Grain, urged farmers not to start any new co-ops but to strengthen existing ones.

Andrew Dare, chairman of Milk Marque Developments, insisted that if several regional co-ops had been established instead of one Milk Marque they would still have been subjected to the same pressures, including investigation by the Monopolies and Mergers Commission, but less able to withstand them.

The industrys weakness was not in Milk Marque but in the 50 other little groups. "We need a leading co-op with 40% of the market, another with 25% and a third with 20%. Forget fragmentation; it will cost you dear," he warned.

Robin Pooley: Why whinge about the power of the supermarkets when farmers could have equal strength?

Andrew Dare: Strong co-ops were essential in the milk industry. Fragmentation would cost production dear.