Saturday, May 16, 2015

Rural Supply Coops-relevancy to today’s farmer?

I recently read an article about the demise of rural supply cooperatives.  Neal Shaw, the CEO of Ashburton Trading Society said “I would go so far as to say it is essentially the issue of young farmers coming through and lacking the understanding of why co-ops were formed”

 This may be true to a point in that there may be farmers out there who don’t understand why cooperatives were formed, but I would argue that the way a lot of rural cooperatives are run these days its not that easy to simply understand why the cooperative was started in the first place.

Firstly, generally rural trading cooperatives were formed to create buying power:  a lot of farmers become shareholders of the cooperative which in turn allowed that entity to use its bulk buying power to secure the product as cheap as it possibly can.   

Accordingly the advantage of joining the cooperative was that you were purchasing the product from your cooperative that had sourced it as cheap as it possibly could and in all likelihood you wouldn’t be able to buy yourself individually cheaper anywhere else.

But is that the case today?   I would say no way.    The rural trading cooperative that I am a member of often isn’t and hasn’t been for a number of years the cheapest place to purchase whatever I am buying.  If it is a significant purchase I do shop around; you have to otherwise I would waste a lot of money buying it from my cooperative.  Is this right, of course its not.

The question is why is this?  Personally I am so sick of reward schemes.  I don’t want to accumulate rewards to buy goods I really don’t need or are simply buying to get rid of the rewards before they expire, its gimmicky crap.    Sell everything in the store at the lowest possible price (which by the very nature of a cooperative, it should not be cheaper anywhere else, except perhaps another cooperative that is more efficiently run) and forget the stupid rewards, this to me is the basic tenet of why a cooperative was set up (and incidentally I think also one of the reasons why vet clubs were started, but that’s another story).

The second reason I have also already alluded to is how efficiently it is run.  Again my coop owns premises all over the place; always seem to have loads of staff and seemingly carries a load of product which traditionally is considered more the domain of the “townie” as opposed to that of the farmer (i.e. one could argue not focused solely  on its core demographic)  Now I don’t know if the cooperative I am member of is efficiently run or not (I hope so), but given that they continually push their rewards schemes, do always seem to have a lot of staff around, own a lot of buildings etc and the clincher being they don’t sell goods cheaper than anywhere else I can buy them, then isn’t any wonder why there are farmers who question the relevance today of a rural trading cooperative and as such probably can’t understand why they were formed in the first place.