Is it time for agricultural businesses to work more closely together?
The lyric from the popular Strawbs song, ‘you don’t get me, I’m part of the union’, became the unofficial anthem of the trade union movement in the UK in the turbulent 1970s and into the 1980s.
Trade unions represent a social and labour movement and are primarily concerned with the organisation of workers to negotiate collectively with employers for better wages, working conditions, benefits and other aspects of workers’ welfare.
Originating in the industrial revolution, when labour conditions were typically harsh and workers had little power, unions served as a means for collective bargaining, giving them a stronger voice.
So, is it time for agricultural businesses to work more closely together?
Great organisations represent Australian agriculture, for instance, the state farming organisation WA Farmers, which represents and lobbies on behalf of its membership.
The issue, however, is that farmers have consolidated and become larger.
There are fewer farmers to become members, and membership rates for state farming organisations around the country have declined.
To represent constituencies requires members but the fact is that it requires financial resources.
So, with the number of farmers unlikely to increase markedly, how do we increase the money available for representing agriculture at state and national levels?
A cost-of-living crisis affects Australians but it doesn’t stop at home.
The cost of farming from diesel to fertiliser has also been hitting high levels in recent years, causing cost-price squeezes and reducing margins and, in turn, causing the cost of foodstuffs to increase.
How can we create a solution that works for all?
Can we increase the resources of farmer representatives while potentially decreasing the impact of the cost of living for Australians?
I have a solution, and it’s aligned with the unions.
In many quarters, ‘union’ is a dirty word. However, there are elements of unionism which can be adapted.
I am thinking in relation to collective bargaining and, specifically, co-operatives.
A co-operative, in relation to agriculture, is a collective that joins together to increase its bargaining capability.
Western Australia has one of the most successful agricultural co-operatives in Australia, in the form of the CBH Group, which is the state’s primary storage and handling provider for grains.
This organisation, effectively controlled by growers, can re-invest its revenue on improvements, providing WA with some of the best grain-handling infrastructure in the world.
How can this be adapted further?
The state farming organisations, while membership numbers decline, are still representing businesses that are purchasing billions of dollars of equipment, chemicals, fertilisers, fuel and other assorted items.
There is the possibility these farming organisations could take the lead in setting up co-operatives for the inputs farmers are required to purchase to plant their crops or grow their animals.
Let’s use a simple example and real-world one.
The federal government is mandating electronic ear tags in sheep (aka eID tags) to reduce the impact of potential incursions of diseases such as foot and mouth disease.
There are some subsidies in some states, which will reduce the additional cost of these tags, but eventually these are likely to be removed.
A state farming organisation could use the purchasing power of its members to secure large discounts for purchasing the tags.
This would have two impacts: the organisation could retain some earnings from the transaction but it would also encourage non-members to become members.
The example above is just one but could be expanded to all the other inputs a farmer requires to produce food.
The state co-operative inputs model can potentially reduce the risk of cost-price squeezes on farms and mitigate against higher food costs for Australians.
This idea is not a new one and is common in Scotland.
It just requires organisations to expand from lobbying to offering farmers services and, through modern electronic infrastructure, these types of organisations could be set up with minimal costs.
• Andrew Whitelaw is co-founder and director of Episode 3 (EP3)
