I have been speaking at farm meetings and conferences for 30 years and I hear the same story whenever I talk to farmers and ranchers about working together, and even forming alliances with processors and distributors, to keep more jingle in their jeans.
The reason they don’t work together, they say with a certain amount of pride, is that they are too independent. As well, they are in competition with each other, which means they are in a game of one-upmanship regarding the size of their land bases and the colour of their equipment.
Read Also
Agriculture needs to prepare for government spending cuts
As government makes necessary cuts to spending, what can be reduced or restructured in the budgets for agriculture?
Other words for this form of independence are bone-headed and self-defeating. It does not contribute anything toward financial success or sustainability.
When I was a kid, farmers weren’t so independent. Because most farms could not afford to own a complete line of equipment, neighbours worked together.
I was at the Managing Agriculture for Excellence conference in Kananaskis, Alta., recently and one of the major topics was value chains, which is the chain of activities from the production of a commodity on the farm, through the various steps of processing, packaging and shipping, until a retail product ends up on the supermarket shelf.
Traditionally, farmers participate only in the first link in this chain: production. After that, the commodity leaves the farm and the middlemen take over. We complain that we don’t get a fair share of the food dollar. That may be true, and if it is, our independence is maintaining the status quo.
It is not as though the other players in the process chain are allied against us. In general, there is little organization and every player is working for himself. This can be inefficient. In fact, Martin Gooch of the George Morris Centre in Guelph, Ont., who spoke at the conference, used the example of the baby carrot business.
The big carrots are grown in Ontario, then stored and handled a few times as they make their way to Michigan, where they are processed into baby carrots. They are stored and handled a few more times as they work their way back to supermarket shelves in Ontario.
In the past, the whole process involved 19 steps before Mrs. Jones could take the tiny morsels home. During these 19 steps, 59 percent of the carrots were wasted.
A value chain is a working agreement between all players in the chain from the raw product to the consumer. Rather than each acting independently, some of the players form an alliance, reducing wasteful duplication.
Each organization in the chain does its part and in the end they keep more of the consumer’s dollar to share between them.
In the baby carrot example, when some of the players formed a value chain, they eliminated seven steps, and decreased waste by 37 percent.
There are many elements in a successful value chain alliance, including having a common vision, developing strategies and knowing what the consumer wants. But the glue that holds it all together is the ability to work with others, see the big picture, build trust and maintain a team mentality.
John Wayne and the Lone Ranger need not apply.
One of the other speakers at Kananaskis talked about farmers in Australia who grow an ornamental plant called grandifolia. They have formed a value chain with brokers and a few other players and sell into the high-end ornamental market in Japan. Their success has led many producers to ask to join their organization. The first criteria the group looks at when considering a new member, no matter how good a farmer he is or how high the quality of his grandifolia, is how well he works with others. They look at his reputation with his neighbours and if his history shows he is not a team player, they won’t let him into the group.
It is getting harder to make a profit as individual farmers. It makes a lot more sense to work together, but that demands a change in thinking. Maybe we need to go back to what we learned in grade school, and hope our updated report cards say “plays well with others.”
Edmonton-based Noel McNaughton is a former broadcaster and rancher who lectures on farm lifestyle issues at agriculture conventions and for corporations. He can be reached at 780-432-5492, e-mail:noel@midlife-men.com, or visit www.midlife-men.com.
