We are delighted to see Defra proposing a big role for farmer co-ops. These developments are the fruit of the close work we've done with Defra and our members since the EU referendum and signals government's intent to help farmers strengthen their businesses through co-operation.
"It is important to build on and widen existing traditions of co-operatives to encourage a stronger culture of cooperation, transparency and fair dealing as part of a modern, 21st century food chain." Defra
Co-operatives UK has submitted a response that seeks to make a clear, cohesive and evidenced case for farmer co-operation. We thank all members who contributed to this response.
Read the summary of our response below.
- We support the public money for public goods policy, so long as this incudes resilient, self-sustaining domestic food production
- Farmer co-ops are a means of ensuring this ambitious agricultural transition can be done fairly, in ways that protect and enhance farm businesses and rural economies; co-ops help foster a more inclusive food economy that shares opportunity, value and power broadly in supply chains ('inclusive economy' is a UK government post-Referendum concept for a fairer "economy that works for everyone")
- Defra should build farmer co-operation into the architecture of its programmes of support for agriculture, in part by drawing on policy design that we already know works, such as the Fruit and Vegetables Aid Scheme and initiatives in Scotland
Barriers to collaboration amongst farmers
- A cultural disinclination to co-operate among farmers
- Farmers’ limited experience and understanding of co-operation
- An inadequate focus on co-operative excellence in food and farming
- The structural power of suppliers, processors and retailers in supply chains
- Limited and uneven government support for collaboration
- The ‘co-operative option’ not being as user-friendly as it could be
- Complex and inconsistent competition policy in relation to co-operation
Benefits of collaboration between farmers and other parts of the supply chain
- Genuine collaboration in our food supply chains will make them more efficient, competitive and ecologically sound, while also increasing fairness for more stakeholders, including specifically farmers
- But crucially, great supply chain collaboration requires great farmer-to-farmer collaboration
Benefits of farmer-to-farmer collaboration
- Innovation - great examples in UK but especially around the world of farmers co-operating in R&D and other farm business innovation
- Productivity - evidence, including from the success of the Fruit and Vegetables Aid Scheme and international comparison, suggests farmer co-operation helps boost productivity
- Competitiveness - co-operation allows farmers to invest in and coordinate the infrastructure, processes and commercial relationships they need to trade in markets at home and abroad where they can maximize their comparative advantage
- Profitability - improved negotiation position on cost of inputs and price earned for produce, as well as opportunities to share a stake in value-added processes and products boost profitability
- Resilience - participation in co-ops can provide farmers with sources of resilience they would struggle to access on their own, such as complex market products for their produce, earning revenue for more processed products and even peer-to-peer lending
What government can do to enable this
- Build farmer co-operation into the architecture of its programmes of support for agriculture
- Draw on what we know works, such as the Fruit and Vegetables Aid Scheme and policy in Scotland
- Redefine a ‘producer organisation’ in a UK context, as a more flexible and all-encompassing basic standard for the kind of farmer collaboration eligible for policy support
- Invest in a ‘collaborative option’ programme, to encourage farmers to collaborate with one another and in their supply chains and then to provide peer support and professional help for them to do so
- Support the development of digital platforms for collaboration to lower the transactional costs of collaboration
- Promote and support collaborative excellence in areas such as co-op business strategy, governance and member engagement
- Create an ‘innovation through collaboration’ scheme that encourages and supports farmers to co-operate in R&D and other farm business innovation; this should not be confined only to certain sectors and should allow existing as well as new co-ops to participate
- Create a supply chain collaboration scheme to support farmer-to-farmer co-operation in downstream activities such as transport, storage, processing, marketing and product development
- Ensure policies for environmental protection and enhancement, risk management and international trade provide for farmers to collaborate
- Make improvements to the corporate framework for collaboration
Environmental protection and enhancement - examples needed!
Farmer co-operation can facilitate a range of initiatives to protect and enhance the environment.
Through co-operation farmers in the UK can take advantage of more opportunities in international trade. This includes:
- Collaboration on standards and promotion
- Collaboration on producing and processing products for particular markets
- Collaboration in developing the infrastructure to process and export value-adding, niche products
The Agriculture Bill
The Bill should provide a statutory mission statement to guide agricultural policy that replaces the objectives of the CAP set out in TFEU39. This should provide an underpinning for:
- The importance of resilient, self-sustaining and profitable domestic food production
- Environmental enhancement
- Protection of farmers' right to co-operate
The final deadline for responding to Defra was 8 May 2018.