A Christmas bonus for farmers – agricultural buying group to share out £1m in rebates after efficiency drive

Jon Duffy, chief executive of AF Group. Picture: Denise Bradley

Jon Duffy, chief executive of AF Group. Picture: Denise Bradley

Archant, Norfolk 2017

A Norfolk-based agricultural buying group hopes to give £1m back to its members in the new year – including its first general rebate to share out profits resulting from the streamlining of the business.

The AF Group (formerly Anglia Farmers), based at Honingham Thorpe outside Norwich, sources more than £270m of goods every year for more than 3,500 shareholder members.

Chief executive Jon Duffy said the last 18 months had seen some “tough decisions and difficult conversations” as the group was restructured to refocus on its core business and cut costs, including the loss of around 40 jobs.

But he said the result has been “repeatable savings” of £700,000 per year out of the group’s £8m annual running costs – an efficiency windfall which will be shared with members.

He said the group hopes to return more than £1m in total rebates in January, of which about £300,000 will be a “general rebate”, beyond the regular contractual rebates offered on products ranging from fertilisers to mobile phones.

“We have been able to increase our efficiency and our bottom line and we are now sharing part of that with our members in terms of a general rebate,” he said. “This will be the first time we have ever done it.

“People who spend over a certain amount will get a share of it. It is a kind of profit share which recognises those that contribute the most will get back the most.”

Mr Duffy said the decisions made at AF could act as an example to other farming businesses seeking to safeguard themselves against the financial uncertainties of Brexit – or to put themselves in the best position to capitalise on its opportunities.

“For the last 18 months we have talked about the need for farmers to control the things they can influence,” he said. “There is no point worrying about the things they cannot control, but they do control their own business model and their own cost base.

“As a business we plan very carefully. We have taken a lot of cost out that was not focused on the core parts of our business. We have upskilled our people and spent a lot of resources on training to make sure we have got the right knowledge and skills within our team.

“We have taken action on the things we can control to make sure we are as agile and fit as we can be to take advantage of whatever opportunities Brexit might throw at us – and I do think there will be opportunities, but we must also have a good defence in place to make sure we are not torpedoed by any disadvantages.

“If there is a ‘no-deal’ Brexit I think we have done all that we can to calm those waters as much as possible.

“Necessity is the mother of invention. One thing I know about agriculture is that while from the outside it looks to be slow moving it is actually very dynamic and overcomes challenges remarkably well.

“I am not trying to belittle those challenges, but within that there will be massive opportunity as well.”

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