Agri Co-op Turnover Reaches £4.4 Billion

The turnover of agricultural co-ops in the UK was £4.4 billion last year, generating profits of £58.4 million for their farmer owners in addition to the direct benefits of participating in a wide range of marketing chains and services. 80 of those co-ops (accounting for £1.4 billion turnover) were members of SAOS.

Figures compiled from annual returns submitted by each business indicate the significant role that farmers’ co-ops now fulfil. The 404 businesses had a total membership of 153,476 (many farmers are members of several coops) and employ £58.4 million of shareholders funds. Analysis across all business sectors reveals that agri co-ops account for 57 of the top 100, with First Milk (ranked at 7th) being the largest Scottish based agricultural co-op, followed by ANM Group Ltd (ranked at 15th).

James Graham, SAOS Chief Executive said “Here is evidence of the fact that more and more farmers are involved in co-operation to manage their costs and risks, and capture value from their marketing. And bear in mind that these figures don’t include the local co-operation amongst neighbouring farms, which has become a feature of most farming businesses. We fully expect expansion and strengthening to continue. Addressing market opportunities either locally or nationally is, for most farmers, achievable only through co-operation and collaboration.”

Contact: James Graham or Rupert Pigot on 0131 472 4100

Notes:

Co-operative Review 2007 contains a table of the Top 100 UK co-ops. It was compiled by Co-operatives UK using annual returns submitted by co-op businesses. SAOS is a member of Co-operatives UK.

James Graham is interviewed in Co-operative Review 2007.
SAOS is pursuing strategies to develop and expand agricultural and rural co-operation in the following:

Expanding co-operation amongst farmers and growers; We aim to increase over-all levels of participation in co-ops and joint venture, and to strengthen established co-ops. Profit Without Subsidy provides a tool to help evaluate the financial advantages of co-operation, and has been delivered, with our partners SAC, to almost 1500 farmers. In addition, our work with some of the largest co-ops, in developing business strategies, capital structures, and governance best practice, continues at a high level.
Developing collaborative supply chains; Some of the value available from the market can only be captured through collaboration amongst the interdependent companies in supply chains. We aim to develop more collaborative practices in supply chains amongst farmer groups, processors, retailers, food service companies, and the public sector. SEERAD awarded us funding for an additional person to undertake this work, and Rona Sutherland was appointed to the position of Supply Chain Development Manager. She will work with Alan Stevenson, our Supply Chain Development Director.
Realising the value in local foods; The market for local foods in Scotland is growing apace, delivering a range of social, economic, cultural, health and environmental gains, and, in most cases, extra value in return for high integrity, high quality, local production. We aim to realise the full potential of this market through the essential development of co-operative and collaborative supply chains to supply larger volumes required to service schools and retailers cost effectively. Our provision of continuing support to the Scottish Association of Farmers’ Markets makes an important contribution to the development and promotion of farmers’ markets in Scotland.
Establishing farmers’ role in managing carbon emissions; Agriculture makes a significant contribution to greenhouse gas emissions through the use of fossil fuels, fertilisers and manures. However, it also has the capacity to produce renewable fuels. We aim to promote and facilitate developments that seek to manage carbon emissions, and provide renewable fuels, through co-operation and collaboration. For example;

use of machinery rings, or joint venture farming, to increase efficiency of machinery and fuel use,

membership of marketing groups that interface with the rest of the supply chain to meet customers’ demands and help manage the total chain carbon footprint,

group production and marketing of renewable fuel crops, and development of supply chains,

group investment in electricity, heat, or biofuel production to add value.