Farmers Opinion Needed

[opiemorrow]

I am a college student that is working towards a degree in management. One of my classes requires that I come up with a business plan. I have come up with an idea but I need some input from farmers (any type of crop/livestock is fine) to help me complete it. Here is a condensed version of what I am proposing.

I want to propose an organization that will help with resource management between small-cap farmers to make them more competitve in today's market. What this details is farmers that are a part of this organization to swap equipment and manpower to increase the overall profitablity of the organization. In turn, the organization would help open larger markets, buy supplies at wholesale, and help file for grants and finacial assistance for the individual farmer. The organization would help do market analysis and crop selection. The dividing up of profits is still on the drawing board.

My question is this. Would a small-cap farmer let a management group step in and dictate what crops are to be grown? Would they let someone else use a piece of equipment if they knew someone else would return the favor? Has anyone hear of such an organization? Any help in this brainstorming is greatly appreciated.

Eric

[ckd129]

Interesting, I would say that to incorporate all your ideas won't work. Reading it, I think you realize it to. Like you say, producers are not going to allow someone to manage their farm operation and tell them what to do. Not to the extent that I think you are proposing. Maybe two or three producers could group together, but this really doesn't happen alot. It is difficult to get people to agree on how to distribute costs, and revenue, who gets to use the equipment on that most crucial day of harvest etc, etc.

The management part of it is a litle different. But will it cost less than hiring an ag consultant? Producers just need somewhere where they can find all the leads and contacts they need. There are agencies or companies that already sell grain and livestock information to producers (some more expensive than others).

Besides, producers know how to farm already. They know what markets are doing. The largest problem is to pull the trigger and sell the grain/cattle instead of waiting for prices to peak. Kills a person every time. This is why most product is sold at prices less than the average traded price.

Good luck

[tdarling]

What Eric's proposing does occur, but more often it's a group of farmers getting together to build a processing plant or to market their products. I think that most farmers are too independent to be told which crops to grow, but they do understand the power of working together to expand along the value chain (as in a processing plant) or to put together bigger volumes and better quality of products to gain some market power.

Next April the new Cooperatives Act will allow the formation of New Generation Co-ops in Alberta. Basically a hybrid between a regular co-op and a limited company, NGC's will be another option for farmers that want to work together.

Machinery sharing has been tried over the years, with limited success. However, custom seeding, spraying, silaging and combining are all very common, and that's really just another way to share machinery.

[ianben]

Here in the UK Farmer buying/selling groups exist http://www.framfarmers.co.uk will take you to one group I know of. We also have what we call machinary rings each one operates in slightyly different way but are really ways getting farmers who want to do custom work in touch with the people who require it. Ring collects the money and charges small fee from each party.
Some also deal in labour or own machines which can be hired like a hedge-cutter or muck spreader.
From what I understand the French co-ops are more like the idea you describe.
They seemed to go further than anything we have here; as far as suggesting how and what they grow.
I have no explanation as to why some of these organisations work and others dont perhaps it is down to the people who run them or the timing of their introduction.
Hope this of some help
Regards Ian

[BTC]

In Atlantic Canada there have been several forms of business operations set up to accomplish most of what you have described. Marketing groups of farmers have got together to provide a range of products to the wholesaler and pack, process or grade at a central location. In several of the cases the farm members have also specialized in one crop rather than all of them producing a variety of crops. (I am talking about vegetables) The specialization in one crop allows them to be more efficient in production and collectively the group markets 15 to 20 different crops. They also pool labour for planting , and harvesting as many of the crops are ready at different times. Machinery, spraying and other services are shared to reduce the costs and 1 person is hired to market the products. These groups also bulk purchase inputs and each own a share of the marketing company.

This type of arrangement can be very successful depending on the group. There has to be the right group with a clear set of objectives and plan to make it work. It is much better to document everything up front to ensure there is no room for interpretations later.

A friend of mine once said you never really know some one until you share an inheritance. I would also say this is true about business profits or loss.

Good luck

[cowman]

I really like the idea of new generation Co-ops. At least in buying inputs. No longer would we have to run around trying to find the best deal on inputs. Deal on a large scale with the big corporations. Of course it could be pretty hard on the small businesses. But then that's progress or so they say.