Bids are being submitted this month to purchase Co-operative Farms outright. A community land trust could be the answer to keep it in the hands of members, but a group of activists is facing opposition to a co-operative buy-out …
Do we want a distress fire sale of the successful Co-operative Farms? Or a Co-op community farm buy-out to save the farms into trust – and help reinvent the Co-operative Group’s values?
When you consider Christopher Kelly’s damning report into the sorry tale of the Group’s recent leadership, with the costly Somerfield and Britannia acquisitions, one questions the wisdom of the distress fire sale of its farms.
The farm sale was announced at the end of February, with bids to be in by the end of May. The agents acting for the Group, Savills, only issued farm particulars on 28 April. Despite repeated requests for information, both Savills and the Group refuse to send details to our group because we are not proceedable or credible – in other words we do not have the £200m guide price needed.
Clearly, the Group prefers selling to hedge funds and speculators for the highest price. They have ignored our proposed alternative of a community co-operative buy-out. In any case, they make this option impossible by withholding information and imposing an impossibly short time scale. Co-operative Farms, built by the skilled work of co-op management and workers, with members reinvesting the farm profits over generations, will be lost as a commonly owned asset if the Group has its way.
So how do co-operative community farm buy-outs work? In 2005-6, we saved Fordhall Farm by setting up Fordhall Community Land Initiative as a charitable organisation, with 8,500 members investing over £800,000. Since then, more than 1,000 community benefit societies have been successfully set up to save pubs, develop community renewable energy, run community supported farms, and hold farms in trust.
I recently helped save Rush Farm near Redditch, Worcestershire, where we set up Stockwood Community Benefit Society with community shares and loans. Rush Farm was where the original Archers broadcasts were made in the early 1950s, and the success of this community buy-out shows just how much popular enthusiasm there is for preserving a working, farming countryside.
Scaling this up for Co-operative Farms, I propose that two bodies be set up: one to preserve the land into co-op trusteeship in perpetuity and to capture land value for community benefit, and the other body to run the farm business.
Firstly, the 18,000 acres of farm land and property would be bought at a fair price and held in trust by a charitable community benefit society, the Co-operative Farm Trust. Investor members would get 1-3 % interest on their withdrawable shares, and incorporated bodies such as co-ops can also invest, with one member, one vote.
Once the trust is registered, with good governance and a business plan, a community share issue can be disseminated locally and nationally. The income of the trust would come from leasing the land to the Co-operative Farm Business, as well as capturing land value for community benefit, such as developing the Leicester eco-town as a co-op garden city.
A question is around the future ownership of the business. The options are for it to continue within Group ownership; establish a separate co-op community buy-out to capitalise the farm business and assist Group with capital; or to sell to/partner with another competent farm business.
This proposal would prevent the speculative purchase by an asset-stripping hedge fund, deliver a fair price for the Group, give a welcome opportunity for investment in community shares by investor/members, offer the Group the opportunity to reinvent its values, and persuade fed-up co-operators to keep shopping, insuring, travelling and banking with the Co-op.
While it is shocking that the Co-operative Group is conducting a distress sale of the farms operation, it is still not too late for Ursula Lidbetter, the Co-operative Group chair, and chief executive Richard Pennycook to urgently convene a meeting to consider the purpose, benefits and details of how a co-op farm trust can work. And it’s not too late for members, staff and board members to advocate for such an achievable solution.