Pilot scheme offers fairer skies for farm co-ops

Australia’s federal government has launched an education pilot to improve farmers’ access to information on setting up and running co-operatives. The Farm Co-operatives and Collaboration Pilot Program forms...

Australia’s federal government has launched an education pilot to improve farmers’ access to information on setting up and running co-operatives.

The Farm Co-operatives and Collaboration Pilot Program forms part of the Agricultural Competitiveness White Paper released in July last year after a consultation by MP Kevin Hogan with a wide range of stakeholders, including the co-operatives industry.

A total of AUD $13.8m will be allocated to fund the programme, which will see Southern Cross University roll out dedicated education tools and resources along with customised support for farmer groups interested in exploring the co-operative business model.

The pilot programme will deliver expert advice and information to up to 2,000 farmers and 100 farmer groups across the nation and run until 30 June 2018.

It includes $3.8m earmarked for new farmer group projects. Groups of farmers will be able to submit proposals for new collaborations to a panel of industry experts, with successful applicants receiving funding support and a dedicated case worker to get their project off the ground.

The government says the programme is a key part of its AUD $4bn agricultural competiveness white paper aimed at strengthening the country’s farming.

Speaking at the launch, acting prime minister and minister for agriculture and water resources, Barnaby Joyce, said: “This national pilot programme is all about enabling farmers to come together, whether in co-operatives or less formal collaborations, and work to improve farmgate returns.

“Agricultural co-operatives allow farmers to own and control more of the food supply chain themselves – giving them greater bargaining power when it comes to negotiating with buyers of their produce.

“The further you reach down the supply chain the better returns received at the farmgate – it’s that simple. It’s better for the farmer, and it’s better for local communities and the people who live and work there.”

Mr Joyce is leading the government in the absence of prime minister Malcom Turnbull, who is attending a series of meetings as part of Australia Week in China.

“The Farm Co-operatives and Collaboration program will benefit from the tried and tested business experience of Northern Rivers Cooperatives Alliance members Norco, Northern Cooperative Meat Company, NSW Sugar Milling Cooperative, Summerland Credit Union, Clarence River Fisherman’s Cooperative and Ballina Fisherman’s Cooperative, as well as utilising the Regional Development Australia network,” said Mr Joyce.

“Industry consultation identified the potential for improved long term benefits of developing a centre of excellence in collaborative business models that can leverage off national regional development and educational networks.”

Over half of Australia's total land area is managed by agricultural businesses
Over half of Australia’s total land area is managed by agricultural businesses

Minister for regional development Fiona Nash was also present at the launch of the programme. She said: “As a producer myself I understand farmers are price takers, not price makers. This programme aims to give farmers tools to control their own destinies and could ultimately improve farmgate returns for farmers right across Australia.”

Kevin Hogan said: “The Northern Rivers is synonymous with collaborative business structures. I thank all those organisations across Australia who contributed to the consultation and had a very real part in improving the design of this pilot project. As a strong advocate for collaborative models that support small and family businesses, I am confident this initiative will help more businesses to succeed and grow jobs and the economies of regional areas.”

Chief executive of the Australian Business Council of Co-operatives and Mutuals (BCCM), Melina Morrison, welcomed the announcement.

“Co-operatives help farmers compete in global markets and improve returns to the farmgate. Where family farming is under threat co-operatives can provide a way for smaller producers to unite to gain access to markets that favour larger players,” she said.

In January, the Australian Senate held its third public hearing to examine whether the regulation of co-operatives and mutuals is appropriate and fair. The Senate’s Economics References Committee looked at duplicative practices, red tape and inconsistencies in the way that co-operatives and mutuals are regulated. It received 59 submissions from the public, including the co-operative and mutual sectors.

“The recent Senate inquiry into co-operative, mutual and member-owned firms recommended improving the provision of education and training on co-operatives and this program addresses those recommendations in a highly practical way,” said Ms Morrison.

The committee has put forward a law reform agenda to enable co-ops to access a broader range of capital-raising opportunities. It also recommended that commonwealth and state governments support the formalisation of some of the innovative market-based approaches to raising capital for small and medium sized co-operative and mutual enterprises in the form of advice and information.

BCCM will work with Southern Cross University to deliver the outcomes of the white paper, said the university’s vice chancellor, Professor Lee.

Last week the acting prime minister attended the launch of an economic report in Perth, which looked at the contribution of Australia’s largest co-operative and leader in the grain industry, CBH Group. Speaking at the release of the report, Mr Joyce said the study’s findings proved the importance of co-operative structures in keeping profits in the hands of “mum and dad” farmers.

CBH has over 4,200 Western Australian farmer members and handles 90% of the state’s grain production. In 2015 it reported a revenue of AUD $4.1bn. Moreover, one in every four dollars generated by the state’s agricultural sector originates from CBH and its members.

“Following decades of investment by generations of farmers, including capital investment in today’s terms totalling $1.2 billion since 2009, CBH is Australia’s most efficient and cost effective grain supply-chain network. Our sole reason for existence is to create and return value to growers,” said Andrew Crane, chief executive of CBH and chair of BCCM.

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