Grower groups sustain the co-op spirit
GroundCover™ Issue: 55
Cooperatives have long been a part of Australia"s rural landscape, but as their numbers dwindle, questions have emerged as to whether the cooperative business model still has currency in the modern agribusiness environment.
For some, the word "cooperative" does not resonate well in an increasingly corporatised world, while others argue the member-based cooperative model represents one of the few remaining protections for smaller farmers trying to compete with large national or multinational businesses.
But new look cooperatives like NSWbased Walgett Special One Cooperative, and grower groups, to which a third of graingrowers now belong, are seen as emerging new forces for brokering (as distinct from operating) services, and for being key providers of technical information.
On the business side, many cooperatives in recent years have sought to become more corporatised and less member-oriented as a way of surviving, but have often only succeeded in disappearing altogether.
The Walgett Special One Cooperative decided to go the other way and become totally member-centred. Rather than trying to compete against large, specialised trading groups, it now acts more as a deal broker to help its members achieve the best trading outcomes. Its chief executive officer, Ed Colless, believes this type of member-centered cooperative could have a significant role in the grains industry, especially as growers look for ways to have more influence further along the value chain. (A special Value Chain Supplement is included with this issue of Ground Cover - contact Ground Cover Direct.)
Mr Colless says the concept of a membercentred business expands the nature and type of business relationships that can be formed.
He says traditional cooperatives need to retain profits to fund their business, but this often comes at the expense of grower returns, and can lead to internal conflicts. By being less bound by traditional cooperative philosophy and principles, a more creative approach can be taken to delivering member benefits.
Many of the groups that have been formed around the country in recent years are already examples of farmer groups delivering benefits to members without incorporating a formal or cooperative structure. Grower groups have become very important because they are a forum through which to encourage and accelerate the adoption of new practices and technologies, he says.
Instead of the traditional buying or trading "co-op" model, he sees grower groups ushering in an important new "technology delivery" model.