Marketing group takes direct route
11 February 2000
Marketing group takes direct route
EIGHT organic growers have set-up a grain marketing group that aims to smooth fluctuations in the organic market.
"The idea is to market the grain as directly as possible," says Geoff Burke, managing director of the Organic Arable Marketing Group and development manager at Elm Farm Research Centre.
Growers who market their crops through the group will become shareholders based on the volume of grain sold, and any profits will be redistributed. "In effect it is a co-op, working on behalf of the farmers," he says.
A time profile contract spread over 6-9 months aims to smooth supply to processors and reduce price volatility. "In the past the organic market has suffered from a dump of grain at harvest, followed by an enourmous price squeeze."
The group will only work with processors who are committed to a long-term and sustainable organic arable market in the UK. In turn, growers are expected to commit all their grain to the group, though exceptions may be made for idiosyncratic historical deals, he says.
A trader will be appointed to run the group, but no investment in central storage is planned. Growers with limited storage may be able to use other group members facilities at set rates.
"We already have 50 to 100 growers interested but are seeking as many as possible," Mr Burke adds. *
Want to convert? Check this out
GOING organic requires a complete re-think of the business. High premiums and conversion payments may seem attractive at first sight, but before making the leap, growers should consider all the angles, says James OGram, farm business consultant with Laurence Gould. Here, he provides a check list.
l Farms most likely to succeed will already be well managed and technically efficient.
l Land must be in good heart.
l Current low input systems are most suitable for conversion.
l Existing hedges, beetle banks and wild areas are an advantage.
• Interest and commitment to organic principles are essential.
l Integrating livestock may need substantial investment.
l If all-arable, moisture and nutrient retentive soil vital.
l Potatoes and veg needed to boost arable margins.
l Local markets help, especially for veg.
l Organic Farming Scheme aid payments only partly offset income drop during conversion.
l Some costs increase: Labour typically 10-30% up, new weed control machinery may be required.
l Investment may be needed to separate organic from conventional produce.
l Tight weed control is crucial – erradicate problems before conversion.
l Natural controls increase risk of reduced yield or crop failure.
l Quality parameters can hamper marketing.
l Reliable premiums are required to profit.
l Stockless systems viability is dependent on the availability of set-aside payments.
ORGANICONTHEWEB
Want to know more about organic? Why not try looking up these websites
www.efrc.com
Organic facts, stats, research and advice from Berks-based Elm Farm Research Station. Alternatively, phone 01488-658298.
www.hdra.org.uk
Henry Doubleday Research Associations site. Organic sector news and horticultural research work in progress. Alternatively, phone 024-7630 3517.
www.soilassociation.org
Leading organic sector bodys news and views. Alternatively, phone 0117-929 0661.
www.ofrf.org
California-based Organic Farming Research Foundations site. News, standards, regulation and research into organic matters from across the pond.
Many of the above have links to other organic sites.