Innovative Models for Producer Co-Operation
The session was affected by the weather in that one of the speakers did not make it through the snow. Fortunately Andrew Trump was able to cover some of the areas in addition to his own presentation. He spoke about the recent initiative between the Organic Milk Suppliers Co-operative (OMSCo) and Organic Arable (formerly Organic Arable Market Group). The idea for a combined feed project first arose in 2004 but did not happen for a number of reasons. The lessons from that early experience enabled a successful re-launch in 2009 where a key factor is the buying relationship between Organic Arable and the individual OMSCo member, not OMSCo itself. This kind of initiative relies on personalities, commitment and simplicity. The second discussion centred around the activities of Thames Organic Growers, an organic growers' group based primarily in Oxfordshire, Wiltshire, Gloucestershire and the London area. Mark Stay was at pains to emphasise that TOG is not a marketing group - every member markets their own produce. The strengths of TOG were in the information exchange that takes place at the monthly meetings and the ability to bulk purchase where appropriate. There is also some machinery and transport sharing. A key to its present success is a part-time secretary. The discussion that followed focused on marketing co-operation and competition.
Andrew Trump and Peter Savidge were due to give a double act in reporting on the OMSC0/Organic Arable initiative aimed at linking organic arable farmers with organic dairy farmers. OMSCo has 300+ farmer members while Organic Arable has 70 with carrying levels of commitment and co-operation. These two organisations have come together in order to facilitate the marketing of UK grown organic cereals to UK organic dairy farmers.
This is not a new idea - it was first raised in 2004 with a view to smoothing out volatility and giving confidence to organic arable farmers. The potential drivers involved changes to feed derogations and ideological reasons. Organic Arable as OAMG was experiencing problems back in 2004 - these were linked to low wheat prices, a poor market for second cereals and a need to strengthen demand for triticale and oats. A link would have been helpful.
In the event it did not happen for the following reasons:
- The concept was too complex at the time
- A lack of transparency in pricing
- A lack of processor co-operation
- A lack of experience in the UK organic sector
- A lack of management of the project
- Structural changes at OMSCo
Given these issues why is it working now?
- It is simpler - the relationship is between OA and the individual OMSCo member
- A has greater resources than in 2004
- The information flow is much better
- Both organisations have experienced good and bad times
- The realisation that volatility is harmful
- What will this bring in the future?
- An improvement in customer confidence
- A greater security of supply of feed for the organic dairy sector
- Greater certainty in the marketplace for the organic arable sector
- Better business planning and investment
What are the ingredients for success?
- Commitment from both arable and dairy producers
- Improved infrastructure
- A recognition of mutual reliance
- An understanding that transaction costs are necessary - some income has to be provided for the management of the trading
- Good communication all round
Discussion followed which focused on the structure of OA and how it works. Reference was made to continental approaches and attitudes to co-operation. A final point was made about cash cycling - keep it in the sector! Simplicity and commitment are key factors as are the personalities of the people involved.
Mark Stay (assisted by Pete Richardson in the absence of Iain Tolhurst) spoke to the workshop about Thames Organic Growers (TOG), a growers' support group based loosely in and around the Thames Valley. The group started early in the noughties with 6 grower members and a programme of 3-4 meeting a year. This set the ball rolling and today there are 20+ members and meetings are monthly. A key to this growth has been the input of a part-time secretary. TOG is not a marketing group.
In the words of their website: "Thames Organic Growers (TOG) is a self-supporting group aiming to increase production and consumption of organic vegetables and to strengthen the integrity of organic standards." Their long-term objectives are to:
- "Inspire young generations to take up organic growing;
- Encourage organic conversion among current growers;
- Mitigate individual (business) disadvantages through efficient exchange of information, advice and experience."
The monthly meetings deal with any business first then there is a meal followed by a walk around whichever holding is hosting the meeting. These gatherings are seen as a vital part of the engagement and benefits of TOG membership. The fellowship provides relief from what can be an isolated existence and the information exchange that takes place every time is invaluable - it is a vital component of group activities.
TOG provides a link between a regional group and the national group, the Organic Growers' Alliance (OGA). TOG members played a vital role in establishing the Apprenticeship Scheme and several members have apprentices working on their holdings. TOG is not a buying group in the sense that bulk purchasing is not the reason it was established but it is able to make some savings by bulk buying onion sets (3.5 tonnes this year), biodegradable mulch and substrates for propagation. Despite this it is a small player in this area.
The issue of bulk buying packaging was raised but few members want to buy generically labelled boxes and other containers preferring instead to have their own labelled boxes, etc. Someone raised the idea of the OGA buyin and marketing packaging - they clearly had not heard of OGA Packaging, a small company set up by the Organic Growers Association in the 80s. TOG members share machinery and transport when it suits and there is also some internal trading of produce by members.
An apprentice working on one of the TOG holdings commented that she was surprised at the level of co-operation when some members are technically in competition given their closeness. This led to further discussion around market co-operation and competition before the session closed.