It's time for our farming co-operatives to do just that... co-operate
PUBLISHED: 16:33 24 January 2020 | UPDATED: 16:33 24 January 2020
Should our agricultural co-operatives be more co-operative? Norfolk farm contractor Kit Papworth, a former chairman of Anglia Farmers and a former member of Fram Farmers, says the time is right for the region's main purchasing groups to consider working more closely together.
Farming is about to undergo the biggest changes it has seen since the 1970s.
Farmers are small, weak purchasers and sellers in an increasingly specialist market.
Globally, this is partly solved by co-operation, with businesses such as Fonterra, Invivo, Arla and Limagrain competing on a global level.
In the UK, we have some outstanding co-operatives, both in agricultural supply and purchasing. But farmers have mostly chosen to consolidate rather than co-operate. In the area of supply, there are a handful of co-operatives in East Anglia with a little friendly rivalry but no actual competition.
All have their roots in a small number of farmers clubbing together to buy essentials such as seed, fertiliser and agrochemicals. By merger and amalgamation, these have become multi-million-pound businesses with thousands of members and turnover in the hundreds of millions, with highly experienced, committed staff and fiercely loyal members.
But fundamentally all of the supply co-operatives are doing the same thing. They negotiate fabulous prices for their members, advise and help their members to make the right decisions, process the subsequent orders from their members, resolve issues, queries and errors, check the resulting invoice, pay the supplier and collect the money from the member. This is summarised by purchasing, back office and member service. The fact that the existing co-operatives are geographically spread is a matter of history rather than necessity.
The present moment is not just the start of a new agricultural revolution with the resulting reduction in the number of active decision makers, but also a unique moment in time.
The chief executives of the two largest purchasing groups - Norfolk-based AF Group (formerly Anglia Farmers) and Fram Farmers in Suffolk - have both announced their intention to leave their roles in the near future. One has already left and the other leaves in the summer.
The supply co-operatives of the eastern counties need to sit down together, realise what they could achieve together, reducing input prices to members, reduce the costs of purchasing and reducing the development of separate and costly back office systems. This does not mean that the existing businesses need to close or even merge. Businesses could retain their identity, manage their members locally, retaining member facing service and order taking teams to be managed locally. They could even retain their own unique funding models.
The chance to have these discussions without the issue of "who is in charge" should not be missed.