Dairy Event 2009: Co-op legislation must change, says RABDF

Legislation surrounding farmer co-operatives needs to change if disasters like the collapse of Dairy Farmers of Britain are to be avoided in future, the RABDF has claimed.

Lyndon Edwards, RABDF chairman, said co-ops needed to be put on a level footing with public limited companies to allow them to compete properly in the market.

Speaking as the Environment, Food and Rural Affairs Committee launched its investigation into the collapse of DFoB, Mr Edwards said the RABDF was due to hold talks with DEFRA over the way co-ops are established and member assets are managed.

The RABDF will be publishing a review of the DFoB collapse next month, which will outline ideas to change legislation and help co-ops ride out problems, he added.

“We have got to learn the lessons from DFoB. There is a lot of reminiscing, but at the end of the day good businesses succeed and bad ones don’t.

“We have some really good ideas, but there is a need to change legislation so co-ops are on a level playing field.

“Lots of things about DFoB absolutely stank. [The collapse] was on the cards for a long time, but it amazed me that cooperative members weren’t aware of what was going on.

“It is about members taking ownership and gaining awareness of what is happening in cooperatives.

David Handley, Farmers for Action chairman, expressed concerns over farmers being given positions of responsibility in dairy co-ops.

“My view is that it’s a ruthless world we live and work in and we need ruthless people to run it,” he said.

“People who are put behind a desk and think ‘I’m important’ are not people we want to run an industry.

“Giving a farmer a briefcase doesn’t make them suitable to run a business.”

Food and farming Minister Jim Fitzpatrick said lessons were being learnt over the co-op’s failure.

“We did what we could at the time to help farmers and the vast majority of them were able to redirect their produce to different areas,” he said. “It’s a matter of picking up the pieces but also listening to the industry and helping them where we can.”

Mr Fitzpatrick said he believed milk producers were well-placed to take advantage of favourable production conditions to secure the future of the industry.

“We want to make sure the industry doesn’t suffer any other collapses, so we are looking forward to engaging with the industry,” he added.

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