Australia pledges $14m to develop agricultural co-operatives

Australia’s federal government has announced it would allocate AUD $14m (£6.6m) to help farmers set up co-operatives. The measure forms part of the government’s white paper on Agricultural Competitiveness...

Australia’s federal government has announced it would allocate AUD $14m (£6.6m) to help farmers set up co-operatives. The measure forms part of the government’s white paper on Agricultural Competitiveness and comes ahead of the senate’s inquiry into the role of co-operatives in the Australian economy.

The federal government will provide the funds for a two-year pilot programme to provide farmers with knowledge and materials on co-operatives, collective bargaining and innovative business models.

Commenting on the decision, Melina Morrison, chief executive of the Business Council of Co-operatives and Mutuals (BCCM), said: “The government has responded to our two key industry recommendations; to improve access to information on forming co-operatives so that farmers can compete for success in gaining better access up and down the supply chain; and to hasten the adoption of the new national legislation for co-operatives.

“This funding commitment shows the government recognises the need for more co-operatives to ensure agricultural producers get a fair return at the farm gate. It’s a turnaround from the pattern of demutualisations of the past couple of decades.

Ms Morrison also referred to the senate’s upcoming inquiry. She said: “The government is showing interest in the advantages of co-operatives in a number of areas. Today’s announcement addresses a key recommendation we have also made to the Senate Economics References Committee on the need for more awareness and education on co-operative structures in all areas, including agriculture.”

In its submission to the senate inquiry BCCM provides six recommendations to grow the sector, including fiscal measures to promote co-operatives, mutual and member-owned businesses as much as share ownership or publicly-listed companies. BCCM’s submission notes that it should be cost effective and straightforward to set up and run a co-operative and that legislation and regulation for these firms should match the best standards for any business.

Commenting on the inquiry, Dr Andrew Crane, CBH Group chief executive and BCCM chair said: “I believe that the inquiry is a wonderful opportunity to demonstrate the strength of the co-operative and mutual business model and its unique focus on the member.”

Melina Morrison added: “The collapse in commodities prices and the on-going effects of the global financial crisis have brought home the need for a mixed economy as a countervailing balance to corporate monoculture. The current focus on the role of small business in the economy has been important in showing the economy to be composed of and strengthened by its diverse parts. A robust mutual sector helps provide diversity across the economy aiding economic resilience.”

Representatives from the sector have made 50 submissions to the inquiry. The committee is expected to report back by 30 November.

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