Food producers are facing a forbidding array of challenges – and with the old adage hanging in the air that co-operation is born from crisis, the Scottish Agricultural Organisation Society (SAOS) took pains to press home the virtues of collaboration at its annual conference, held in Crieff, Perthshire, earlier this month.
Allene Bruce, the SAOS’s head of supply chain development, said the organisation is working with other organisations such as Scotland Food and Drink to “build a resilient industry that can withstand and respond to market volatility, economic shocks and supply chain disruption”.
She added: “Resilient companies not only survive, they outstrip competitors with growth.”
WIth the postwar period of stability is over, farmers have been hit by rapid sequence of market shocks, she said, wit Brexit, Covid and the Ukraine crisis coming on top of chronic stress issues like climate change, disease in plants and animals, geopolitical instability, shortages of land and water, increased urbanisation, and changes in diet.
In response SAOS, and its partners are developing tools including a risk register, supply chain maps, and supply chain resilience tests. And a resilience tracker will recruit a panel of sectoral experts to track changes over time, identify areas of weakness, and create benchmarks – looking at issues such as branding, market access, skills, biodiversity, climate resilience and the ability to deal with shock.
The good news, according to Ged Futter from grocery consultants Retail Mind, is that Scotland has an “amazing supply chain”, even if it is under strain. Part of that strain is “relentless” price pressure from retailers – but, he told the conference, another problem is that agriculture sector is not co-operating enough. Producers are stuck in a “last man standing” mindset, he argued, waiting for competitors to fall by the wayside, “but it’s better if we work together, because we want a strong industry and food security”.
Co-operation – which is “about self help and securing your future”_- will give producers more leverage when negotiating with supermarket chains on price, Futter argued. Food producers should also develop export markets, he said; if they are less reliant on domestic retailers, they can say “no” to their demands. Business negotiation training is also crucial if farmers want a level playing field with supermarkets, he added.
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Next up was a session looking at agri co-ops in action, featuring Angela Porchez, general manager of Angus Growers, and John Gray, managing director of Angus Soft Fruits. Both painted pictures of impressive business growth – from humble beginnings to a huge market share and a “renaissance” in Scottish berry growing – but said the fruit farming sector now faces soaring production costs which threaten the viability of the industry. “Almost half of British berry growers say the business is not affordable,” warned Gray, adding that the situation will only worsen with increases to the Living Wage and National Insurance contributions.
To help the sector thrive, government support is needed to access foreign markets, the panelists said – but co-operation can also help. Porchez said her co-op is a non-profit, run on a one-member, one-vote basis with a mission to get the best value for its growers.
“We work with open dialogue, there is transparency with everything we do, including pricing and commission,” she added. “Trust is a key theme to co-operatives.”
Co-operation, she said, helps growers stay responsive to changing consumer demands, to manage supply changes, and to access markets, resources, services by increasing their bargaining power through collective marketing. Bulk procurement helps reduce the costs of inputs and services, and the co-op offers social and community development, advocacy and representation.
“We also act as a gateway to funding,” she added. “As an umbrella organisation we can apply for larger pots of funding. Smaller growers don’t have the administrative resources to apply for these kinds of schemes.
“We are a family … there is a solidarity there which is very common among good co-operatives.”
Another lesson in co-op resilience came from Andy McGowan of Scottish Pig Producers – a busy marketing co-op representing 50 businesses. It lost its factory site in 2014, putting the co-op into crisis mode; in response, it approached another co-op supplying the site, Scotlean, and formed a joint venture, Quality Pork Ltd, and worked to create a modern supply chain.
“Farming and meat processing are very different skillsets,” he said, “but this gave farmers a seat at the table when it comes to processing.”
The joint venture built a new processing site and abattoir in 2015, and began attracting retail interest a year later. Crucially, it gained an export licence for China – a market where customers eat all parts of the pig while UK shoppers only eat certain cuts.
The co-op went on to face further challenges – with Brexit bringing labour shortages and Covid temporarily halting exports to China – and in 2022 the abbatoir business was sold to Browns Food Group.
In such circumstances, said McGowan, it is important for a board to take a long-term perspective, with a commitment to supply chain and industry development, and for members to be genuinely collaborative when times get tough – with members unaffected by problems being happy for the co-op to take money to give to those who are suffering.
Collaborative efforts continue; this month, Scottish Pig Producers and Soctlean joined forces with an English co-op, Thames Valley Cambac, to form the United Pig Co-operative, which will be the leading provider of support services to independent pig farmers.
In an audience Q&A, Porchez and Gray agreed that co-operation in the fruit growing sector has so far been driven by need. “You need to work together if you’re going to survive,” said Porchez. “It’s hard to get people to think co-operatively but it’s very rewarding.”
“We need to make the case better for collaboration,” said McGowan.
“As a farmer, remember you’re not as good as you think you are,” added Gray. “No single grower is doing everything right, everyone can learn from others.”
Joining the panel, Theresa Dougall of Scottish Quality Crops said: “Don’t wait for a crisis to come together. Do that talking all the time and not just when you suddenly need somebody.”
The final session of the day looked at producer organisations in the notoriously volatile dairy sector – which, said Hamish Walls from SAOS, had become “the wild west” after deregulation in 1994. Once the 2008 financial crisis brought further economic challenges, dairy farmers formed a voluntary code, in 2012, and in 2015 Davidstow Creamery Direct began a trend of forming producer organisations – a model which is more meaningful in the context of this year’s Fair Dealing Regulations, which set out UK rules for milk purchasing contracts.
Partnerships offer a way forward, said Walls, and co-ops help with leadership, skills and marketing – but the “key issue is still price, and managing change is always difficult when your members are losing money.”
Moving forward, Walls wants to see more producer organisations in dairy, “to spread good practice, access more funds and resources, and to build value.”
Next, Walls introduced a panel comprising SAOS chair Rory Christie, of the Milk Suppliers Association; Max Sealy of Selkley Vale, and Ian Harvey of Davidstow Creamery Direct.
They shared lessons in how collaboration helps producers satisfy the demands for traceable supplies, sustainability and predictable supply from customers like Cadbury’s.
But, warned Christie, there a challenges. Sustainability measures such as carbon sequestration are expensive, which could prompt an exodus from the industry, and bringing on the next generation of co-operators is a challenge.
“When it’s going well your farmer members tend to be apathetic” he said, “when it’s not they come forward. It’s always about taking the committee with you.
“Getting the next generation involved is difficult – I’ve been in this role for 10 years because no one has pushed me out of the way. We need to talk about how we get the next generation in, and how we make it more diverse.”
“Building long-term relationships with producers is important,” said Harvey. “Producer organisations are a real force for the future.”
Priorities, the panelists agreed, included investment in the future, long-term relationships between processor, supplier and retailer, and producers being “in a position to say no to a customer that doesn’t deliver.”
Wrapping up the conference, SAOS CEO Tim Bailey warned that the clock is ticking in terms of strategic growth plans, climate targets and sustainability targets. “We have the targets, the diagrams, the road maps,” he said. “Now it’s time for action.”
Making the challenges worse, said Bailey, is a constrained public purse. “We need a lot of bang but there’s not a lot of buck.”
His solution is co-operation. “It’s quite fitting that here we are in 2025, the International Year of Co-operatives … SAOS is a co-op owned by 60 co-ops that deliver £1bn of output every year … We’ve got a proven track record.”
Along with other sector bodies like Co-operatives UK, said Bailey, SAOS delivers resources like education, mentoring and support, and is lobbying for legislative and policy support – for instance in ensuring the Agriculture Act in Scotland had provision for co-ops recognition and support in the Rural Support Plan.
But co-operation needs more support, he added, in terms of funding for producer organisations and support programmes for co-op startups. And backing is needed on product and market development, technical skills and training, market intelligence and brokerage services, and investment in agri tech.
The government should also offer support on sustainability, he argued. “The quick way to do those environmental plans is to do it through the co-ops, you can do it on a much much bigger scale,” he said. “Coi-ops can de-risk R&D and trial work … We need to get funding allocated towards it and get it moving ASAP.
“Give us the tools, co-ops will finish the job.”