According to Richard Anscombe, CEO of Suffolk-based Fram Farmers, the UK’s agricultural industry should reflect very carefully on life after Brexit. T raditionally, cooperation amongst farmers in the UK has been low, mainly due to the relatively large scale of the average UK farm business, allowing farmers to operate with a high degree of independence in terms of purchasing farm inputs and marketing what they produce. That might sound like good news by increasing price competition, but exactly the opposite could happen. Consolidation within the agricultural supply sector will become more pronounced and those companies/distributors which remain will become larger and focus on protecting shareholder value creation and profitability. Individual farming businesses will have less, not more, influence over suppliers. According to Richard, this model is particularly appealing to independent-minded ‘millennials’, the next generation of farmers who tend to eschew convention, don’t like having products and services ‘pushed’ on them and are wary of large corporations. They want to work with independent organisations with the highest ethical standards and appreciate the values of a true cooperative.
In Europe however the average farm is much smaller, which means owners cannot justify the same level of infrastructure and the need to work together is much greater. For all but the largest farming businesses, membership of a cooperative is a given. Ironically, according to Richard Anscombe, UK farming businesses post-Brexit may have to become much more like their continental counterparts. Many of the most professional, innovative and dynamic operations already appreciate this. Numerous farmers in 2019 realise the importance of belonging to a strong farmer-owned cooperative which aggregates members’ purchasing/marketing volumes and negotiates effectively on their behalf to save time, money and administration, whilst adding value and increasing returns. If cooperative membership is right for them then it should be a ‘no brainer’ for smaller operators. Whatever the eventual outcome of the Brexit process, UK farming businesses will have less money to spend on inputs as area-based payments are phased out in line with the Government’s much publicised ‘public goods’ yardstick. With less traditional farming taking place, fewer inputs will be required, so manufacturers and distributors will compete for a smaller market.
To survive in a post-Brexit market, farmers will have to be alert, agile and well informed. One way to achieve that is through membership of a true cooperative which is owned by its farmer members, operates exclusively in their best interests and is completely impartial, trustworthy and transparent. For a cooperative to be successful, complete commitment and trust are needed on both sides. Members must trust their cooperative implicitly to always do what’s right for them and, conversely, must understand that it’s an exclusive, confidential club which they should support fully. In short, both parties need to earn the other’s trust. Fram Farmers is amongst one of the UK’s most successful farming cooperatives and this, Richard believes, is down to a number of factors. “Fram Farmers is dedicated to helping member businesses achieve best value and make better, more profitable decisions. Benchmarking is a key part of this process. In 2018, for example, we analysed the prices of 15 key inputs during the previous seven years and found that we had saved our members an average of 9.6%. Even the largest farming businesses cannot replicate the expertise, resources and range of services that we provide, including industry experts who give totally independent input purchasing and combinable crop marketing advice. Consequently, they recognise that membership is the most cost-effective, efficient way to deal with suppliers and those who make full use of their cooperative find it very liberating.”
So whilst the UK looks set to tackle the tangled mess which Brexit has become, the future is looking somewhat more positive for farmers. In Richard’s opinion: “I have no doubt that the best days for well-managed farmer-owned cooperatives are yet to come. Fram Farmers’ future will be not just as an organisation which purchases inputs and markets combinable crops on members’ behalf, although those will remain fundamental. It will also be as a trusted source of added-value services and an information-hub to help progressive farming businesses make decisions and manage change in this fast- evolving world.” Richard Anscombe is Chief Executive of Fram Farmers, a farmer-owned cooperative which provides the purchasing, grain marketing and administrative function for over 1200 farming businesses throughout the UK who collectively farm over 270,000 hectares. Based in Framlingham, Suffolk, it has an annual turnover of £195 million and employs over 50 highly-qualified professionals.
www.framfarmers.co.uk
Scrutton Bland are the official insurance partners of Fram Farmers, providing members with a range of insurance products and services to provide cover for agricultural operations.
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