How well farmers work together is a hot topic, with strong views expressed across the industry. Five farm collaboration experts give Charlie Taverner their views on how British farmers measure up and what can be done to boost co-operation in the UK.
I don’t think it matters whether you are talking about farmers or people making grommets or anybody making anything – people always see competition in whatever they do.
There are farmers who want to farm the field next door and so many farmers who know of their neighbours but do not know their neighbours.
There is that mentality wherever you go in the world and collaboration is not for everyone.
But for those who are willing to collaborate the benefits are great. As soon as you can cross the hurdles and you can see the bigger picture, it gets addictive.
You see the financial benefits and say: “What will we do next to drive those efficiencies?”
If you have got the right mindset – that it is not about competition – it will work for you. The pounds and the pence you save are the added bonus.
But it is the kind of thing that cannot be forced on everybody.
There are many good and successful examples of farmer collaboration and agricultural co-ops in the UK despite the commonly heard view that “we don’t do co-operation”.
What you say:
“When I came into dairy farming the first thing I did was to join a discussion group, never looked back, always learning.”
Daniel Burdett @farmerdanb
“Collaboration is what we are all about – from farmer to consumer. Creating value.”
Neil Darwent @freerangedairy
“Things are improving with progressive farmers and younger generation, but still a long way to go.”
James Beary @farmerbeary
“How about farmers working with community to share risks and rewards of farming? Community supported agriculture’.”
Tracy Wathen-Jones @tracydwjones
“Spreading costs offers the greatest potential as it is allowing sustainable, efficient production, but with an eye towards expansion and growth. This will only ever be done through working together.”
Will More, Manor Farm, Norfolk
“Successful co-operatives listen to their members and the needs of the industry. Failure only happens when the wrong strategic decisions are made by the business.”
James Morley, Sudbury, Suffolk
Farmer collaboration and co-ops are very effective at inter-farm level where they pool resources, management and buying power.
Farmer co-ops are important and effective in carrying out specialist supply-chain roles where scale benefits can be realised.
Typically this means uplifting, storing, aggregating and marketing primary products to meet the precise quality and volume specifications and supply programmes of the next businesses in the chain, whether food manufacturers or retailers.
It is in food manufacturing and branding that UK farm co-ops face the biggest challenges and the biggest risks.
While circumstances dating back to the dissolution of the marketing boards created a very tough environment for new dairy co-ops to establish, more generally across all businesses engaged in food manufacturing and branded marketing, access to capital is the critical issue because the requirement for more capital is relentless.
It is usual to find that the co-ops with global reach that operate elsewhere in Europe have the advantage of several generations of accumulated capital and a reasonable proportion of it is not withdrawable.
UK agriculture has a chequered history with collaboration and working together.
There have been pockets of fantastic examples; equally there have been very poor or disastrous outcomes.
What is collaboration? Achieving shared goals? Is it two farmers sharing a piece of kit? Is it two farmers combining resources to form a new business or opportunity?
Perhaps being part of a discussion group where full financial data is shared and compared?
Or is it being part of a much larger organisation such as Arla or being a shareholder of a business such as Mole Valley Farmers?
Where it works well the benefits are plain to see.
The reason collaboration hasn’t been as successfully understood and promoted in the way it could have been is because people are always keen to focus on the negatives and failures rather than the successes.
Many are far happier being in control of their own destiny and far happier to work alone because it is easier and takes less time or dialogue.
In truth, the best examples of collaboration suggest quite the reverse. The old adage is true: two heads are sometimes better than one.
Collaboration in the form of farmer co-operatives will only succeed in the long term with member commitment, which is the business model that Anglia Farmers has linked to strong discipline within the membership.
Just using the co-operative to quote a price enabling these prices to then be used to negotiate your own deal is the first stage of losing the benefits.
Moving away from this inevitably leads to the organisation moving from an open accounting system (which Anglia Farmers uses) to one where different members pay a different price depending on who shouts loudest.
The final stage of this is a “co-operative” merchant where the business model is no different from a normal commercial business and there is little incentive to trade.
We should not be afraid of scale provided it is used for good. Planned purchasing of committed volumes where final pricing is hidden is the holy grail that we are striving for constantly in everything we do.
Farmer co-ops work because they are owned and run by the farmers themselves.
This gives individual farmers greater power in the marketplace than they would have alone, and means farmers can direct their co-operative to work in their best interests – not those of investors or shareholders.
We have numerous success stories such as Anglia Farmers – the UK’s largest agricultural purchasing group – which buys everything from machinery to telecommunications services for its 3,500 farmer members.
There are challenges for UK farmer co-ops. Some are shared with others.
Some are specific to co-ops, including a national policy framework dating back to the Agricultural Marketing Act of the 1930s, resulting in fewer UK agricultural co-operatives compared with other countries.
Co-operatives UK will play a major role in overcoming these challenges through a major programme to be launched later this year.
It will further strengthen a [agricultural co-operative] sector already worth more than £5bn through high-quality governance, member development, and a stronger voice for farmer co-operatives in national policy.