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Joint-venture farming
Encouraging joint venture farming, better sharing of resources and improved links in the food chain, including co-operative marketing ventures.
Farmers may be unaware of the possibilities offered by joint ventures or be unable to find the time to investigate these properly. This could lead to a lack of awareness on the part of farmers of the nature and magnitude of the benefits available or how they might get them. There may also be some behavioural issues at play if farmers value their independence and are reluctant to join with others in forming Producer Organisations. Options for Joint Venture Farming (JVF), such as contract farming, share farming, labour and / or machinery sharing, potentially provide a way to greater specialisation, more efficient use of resources and for higher performing businesses to expand the scale of their operation, helping to facilitate restructuring. However, evidence suggests that currently only a small proportion of farmers engage in such JVF arrangements.
Joint venture farming is just one of many tools available to farmers to manage risk and resilience. Arrangements have been common for at least 30 years (much longer if you count co-operatives) and for many, JVs have provided a valuable solution to a problem. However, there is an increasing tendency to consider JVs as an end in themselves irrespective of value they provide (and even a new idea). There is hardly a farmer, and certainly no business consultant, who is not aware of the opportunities they can provide. It is important to respect non-participation based on understanding of the possibility. After all, if it proves to be the wrong decision the major loser is the decision maker. There is a clear self interest where the JV is worthwhile and consequently is there really a need for yet more intervention in this area?
Marketing strategy and use of derivatives is likely to be more rewarding.
The fact is that markets for agricultural produce tend to have a very limited number of buyers.
The assessment of current/recent initiatives would be invaluable in exploring the potential issues surrounding this theme. Although the focus of much work by different stakeholders, establishing such ventures has been particularly challenging and greater awareness of the issues involved would facilitate any future work. Clearly such ventures create opportunities to improve competitiveness and resilience whether it is from optimising use of inputs or benefiting from larger scale, longer term supply contracts. Identifying the shared objectives behind successful collaborative ventures would be invaluable. There are also lessons to be learnt from the failures (such as DFB), which prove a reminder that joint ventures are not the panacea for moving up the value chain.
It would also be interesting to find out what tools/resources are available from government to stimulate collaboration and to learn if they have been effective elsewhere. If not from Government, then identification of where the impetus will come from is needed. Some consideration of the mixed messages with regard to farming and food should also be made. For example, collaboration and closer integration in supply chains is being encouraged, yet Government could do more to place British farm assurance standards at the heart of public procurement strategy. Government encouragement for grocery retailers to adopt more responsible procurement practices with suppliers would also support collaboration and help deliver a more balanced sharing of risk and reward through the supply chain.
It is also worth mentioning the slow progress in the establishment of a Grocery Market Ombudsman. This is important when considering the wider issues of resilience and competitiveness, given that the Competition Commission report identified that excessive risk and unexpected costs by grocery retailers to their suppliers will have an adverse effect on investment and innovation in the supply chain.