More to buying groups than just bargain prices
18 August 2000
More to buying groups than just bargain prices
Buying groups can offer farmers big savings
on a range of inputs. Tamarind Davidson and
Robert Davies discover whats on offer
EVER considered joining a buying group? The longer you wait, the more you could be missing out, says Neil Simmonds, manager of Samuel Roses North-ampton-based outfit.
"Theres much more to buying groups than just negotiating a cheaper price. Success is all about cultivating trusting relationships with the farmer and supplier, and it is very much a two-way operation. The supplier benefits from having an assured market that he maybe couldnt tap into before, which strengthens his market position, and it can also relieve pressure and time on the farmer."
But its not just the big farms that gain. "Smaller farms can make equally good savings and it is infinitely flexible and transparent. Farmers know exactly who their supplier is and what prices are available. If they find a better deal somewhere else they do not have to go through us."
George Glover farms 185ha (457 acres) of combinable crops on heavy clay at Safefield Farm, near Huntingdon, Cambs, and has been a member of the group for a year.
"Since joining, my total input costs have reduced by about 12%. This has made a considerable difference to the farm business – it has been a way of cutting my costs without reducing inputs," says Mr. Glover.
"But its not just the cost that is important. I can guarantee that a product is here the next day, or sooner if its urgent. And there is always an agronomist at the end of the phone if you need any advice."
A crop-walking service, included in the membership, allows the group to pinpoint the most effective product for any situation, adds Mr. Simmonds.
Best prices for a full range of products, including wearing parts and computer software, are negotiated with suppliers. When the client places an order, the system selects the most suitable source and contacts them with client details.
"We take care of the paperwork, and can guarantee that the farmer will have confirmation of his order within the hour – the farmer trusts us that we will do them the best deal we can."
Since the group was set up three years ago, it has grown from 20 members in 1999 to 110 and covers an area of about 24,300ha (60,000 acres).
"We have no limits and will continue to invest in growth. We have a purpose-built system in place so as we expand administration and other costs will decrease," explains Mr. Simmonds.
Full annual membership is £110 for the first 60ha (150 acres), plus a decreasing payment for each acre thereafter, up to a maximum cost of £610/year. There is also a service charge of 1-2% of turnover.
"Buying groups are certainly the way forward. With their popularity continually growing we now have plans to develop an e-trading service, with the hope of reducing costs even more."
BUYING GROUPS
• Significant savings on inputs.
• Guaranteed quick delivery.
• Less paperwork.
All farmers can gain from buying groups, says Neil Simmonds (right). Cambs farmer George Glover reckons to have saved 12% on input costs.