Franchise models aim to replicate co-op successes

A NEW resource designed to boost the rural co-operative sector has been launched by the Plunkett Foundation. Working in partnership with Co-operatives UK, and with financial support from...

A NEW resource designed to boost the rural co-operative sector has been launched by the Plunkett Foundation.
Working in partnership with Co-operatives UK, and with financial support from Co-operative Action and Defra, the Foundation has researched and published a series of three (with two more to follow) very detailed and informative franchise models ? essentially off-the-shelf business packages ? looking at different aspects of agricultural life and the co-operative opportunities they offer.
Each of the models is packed with practical information from an analysis of the particular industry to market strategies and financial projections (all based on real data).
Denise Ault of the Plunkett Foundation told the News that the project, which was started in 2004, is all about sharing and transferring knowledge: "If someone is doing something that works in one part of the country, why shouldn&#039t a co-operative be set up in a different area to do similar work?"
And while the Foundation has not set any targets for take-up of the models, Ms Ault expects the majority of interest will come from the existing farming community: "The business of agriculture is very tough and farmers are constantly having to look at new ways to get the most out of their most valuable resource ? land.
"These models help farmers to explore ways in which they might be able to work with their neighbours or others to find more profitable uses for that resource."
And Ms Ault says that on the whole, farmers are willing to consider the idea of co-operating with other farmers: "It usually depends on previous experiences they may have had," she says. "Some take a bit of persuading but it&#039s an education process.
"These models show, for example, that rather than a farmer planting willow and then just selling it on, by forming a co-operative with others, there are all sorts of opportunities further down the line for much more profitable and sustainable businesses."
The first stage of the research involved an analysis of all available relevant literature to find out what other researchers had discovered about what makes an agricultural co-operative successful. This concluded: "The successful organisation should be outward looking and market focused, flexible and responsive to change, and able to finance growth and development in creative ways.
"At the same time, it must never lose sight of its primary strategic purpose ? to provide benefits to members. Indeed, it should regard its members as a major asset rather than a disadvantage, and must find ways of turning it into long term competitive advantage."
The first of the franchise models looks at farmers&#039 markets which creates opportunity for co-operative development but also present a lifeline to many small producers who in many cases only sell through such markets.
The statistics highlighted in the model illustrate the potential for growth: "Currently farmers&#039 markets are one of the fastest growing sectors in the food market. Twelve per cent of households shop from farmers markets: 70 per cent of British consumers want to buy local food and 49 per cent want to buy more than they do now."
The second model looks at charcoal burning and this has identified two ways in which a co-operative could create income for forestry workers. It would first create a market for charcoal products and then provide additional part-time employment for members who operate the grading and packaging machinery.
Such a co-operative would not only benefit the rural community by providing employment and income, it would also help the environment by reducing CO2 emissions and de-forestation. And it would help to enable British woodlands to be properly managed for the benefit of wildlife.
The third model looks at using wood for heat and power and this suggests that "by forming producer co-operatives, growers can improve their control of the market place. By aggregating product from several different farms they will gain the critical mass necessary to supply power stations, and will also develop the economies of scale needed to develop an infrastructure for supplying medium and small customers in the future.
"In the long-term, the opportunity exists for producer groups to expand their operations downstream, with the ultimate possibility of the co-operative become a small energy supply company (a mini-ESCO)."
Additional models being completed include selling locally produced food to businesses.
The Foundation believes that central to the success of most agricultural co-operatives are the 5Cs; clarity of purpose, competent leadership, core funding, communication and commitment. On funding issues the Foundation recommends that while some initial start-up funding may be required, wherever possible funding should come from members as this helps to encourage commitment and also helps to attract additional loan finance.
Ms Ault is hoping to secure additional funding in order to be able to keep the models up-to-date and develop additional ones.
The franchise models can be downloaded from: www.plunkettfranchisemodels.org.uk.

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