Professional thinking advised

FARMER-CONTROLLED BUSINESSES need to make sure professional management and membership structures are in place before asking banks for finance, says the English Farming and Food Partnerships.

Steve Ellwood, an EFFP board member and head of agricultural banking at HSBC, said this was a key reason why his bank, in conjunction with Barclays, was prepared to back Dairy Farmers of Britain‘s recent £75m takeover of Associated Co-operative Creameries.

“The commitment of members to support the deal to supply the product and share risk was a vital part of the process,” said Mr Ellwood.

One mistake that had held back some FCBs was trying to make their boards too inclusive, said Mr Ellwood.

“There needs to be a democratic process that takes into account member representation but that is not the same as running a board.

“One of the challenges is not trying to select a board based on geography or representation but on the skills that individuals will bring to the business.

“This is really important and is a fundamentally important issue that FCBs need to deal with,” he added.