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INTRODUCTION WAOS founded in 1922 as the central body for Agricultural Cooperation in Wales Secured Government assistance in 1931 Cooperation boosted by.

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Presentation on theme: "INTRODUCTION WAOS founded in 1922 as the central body for Agricultural Cooperation in Wales Secured Government assistance in 1931 Cooperation boosted by."— Presentation transcript:

1 INTRODUCTION WAOS founded in 1922 as the central body for Agricultural Cooperation in Wales Secured Government assistance in 1931 Cooperation boosted by Agriculture Act 1967 (CCAHC created) Agriculture Marketing Act 1983 (FFB created to subsume CCAHC) FFB withdraws from Agricultural Cooperation in Mid 1980’s WAOS not supported financially since WAOS operates as an Agri-food consultancy and is financed exclusively from fees earned_

2 THE WAOS VISION Farmers have profitable and sustainable futures as mainstream suppliers of agri-food products. By cooperating farmers will be able to capitalise on opportunities from the increased flexibility under the decoupled support system Opportunities from growth in vertical collaboration in food chain as a response to greater demand for efficiencies

3 WHY COOPERATE Food security and food inflation should give the primary producer an advantage Value growth benefits retailers and processors more than producer Rationalisation in food chain weakens the farmers strategic position

4 WHY COOPERATE SFP leaves market forces determine farm gate prices Without initiatives by farmers their market returns will be dictated by world agricultural commodity prices Future characterised by new opportunities as Food security becomes more relevant Relationships have been established in the supply chain for the benefit of processors and retailers Food supply chain concentrated whilst farming remains fragmented Cooperation best solution but lags behind rest of world

5 OPPORTUNITIES FOR COOPERATION Food safety a major issue Changing consumer lifestyles and demographics Increasing demand for convenience, healthier, and environmentally friendly foods at a price Food provenance, assurance, traceability, fair trade, organic supply and carbon footprint are issues that will come to the fore

6 WAOS DEVELOPMENTS Welsh Lamb and Beef Producers Ltd I and P Cooperative of 7500 livestock farmers producing 75% of the lamb and beef in Wales Farm assurance Organic Certification

7 WLBP Ltd Farmers route to market. Farm assurance a minimum requirement for entry to UK multiple retailers Earned recognition under cost and responsibility sharing initiatives Lower Risk Profile for Statutory compliance audits (FSA, Animal Health, Environment Agency, Cross compliance …..) Owned by farmers under Subscription model of constitution Data management and information resource

8 WAOS SERVICES Agri-food consultancy Financial Services Authority “Sponsoring Body” for Model Rules Management Services and resources Corporate Governance Board and company secretarial services Non Executive Directors


10 THE PRODUCER Retailers and Producers see collaborative opportunities within current structures rather than producers moving up the food chain This will not result in investment beyond farm gate and farmers taking a more proactive role in engaging with consumers The belief that farmers are incapable of playing a larger role in the food chain must be challenged Niche market opportunities strong for Welsh Produce e.g. Welsh Mountain lamb

11 SERVICED FOOD SECTOR Has been the UK’s fastest sector worth £50 Billion accounting for 35% of total food expenditure Consumers demand more information about the food they consume Food service need to source from recognised accredited sources Cooperation’s ability to bring critical mass and traceability represents a real opportunity

12 COOPERATION IN WALES Farmers are entrepreneurs and want a capitalistic approach to cooperation with return or at least preservation of investment Farmers will need PROFIT as one of the drivers for cooperation Recent trends in Wales have been for the development of “quasi” cooperatives operating in the name of cooperation and not by structure

13 DEVELOPMENTS IN UK SAOS-Scotland-substantial funding from Public Sector equivalent to £382,000 p.a in 2009 EFFP-England-awarded £2.5million by DEFRA in 2004 to “Help farmers in England work together and become more competitive and profitable” EFFP restructured in 2009 as an Agri-food consultancy

14 COOPERATION DELIVERS Purchasing Cooperation (Buy Inputs at lower prices) Marketing Cooperation (Joint Activities for outputs) Processing Cooperation ( benefits from added value )

15 KEY FACTORS TO DEVELOP SUCCESSFUL AGRICULTURAL COOPERATION Driving motivation must be profit not cooperation for its own sake. Structures must be well capitalised Planning must be strategic and long term Farmers must participate financially and commit to enterprise Recruitment of top professionals paid accordingly and given appropriate autonomy Strict corporate governance to ensure integrity and financial scrutiny and probity

16 DELIVERY MECHANISMS Communication to farmers and the supply chain Understand requirements of consumers, food retailers, and food service companies Good governance and monitored financial performance to minimise risk of Business failure Maintain Member Confidence and support Data Capture and Management of Information Develop a dynamic Strategy Develop the appropriate constitutional structure for growth that best fits the strategy (Structure follows Strategy)

17 CONCLUSION Welsh farming a lifestyle as well as a livelihood Farming is long term business Cooperation can be the salvation as Cost and Responsibility sharing initiatives come on line Farmers must invest in their own destiny Catalytic funding from public sector would pay good returns as the Industry takes more control Wales cannot be left behind


19 WAOS LTD AFFILIATED AGRICULTURAL CO-OPERATIVES IN WALES CO-OPERATIVESECTORTURNOVERACTIVE MEMBERS TRADING SHARE HOLDER REGISTER Corwen Farmers LtdAgricultural Supply£5 million8501,200 Wynnstay Group plcAgricultural Supply & Other industry £300 million4,500 Carmarthen & Pumsaint FarmersAgricultural Supply£20 million1,8007,500 Clynderwen & Cardigan Farmers LtdAgricultural Supply£34 million2,2506,200 Hay & Brecon Farmers LtdAgricultural Supply£12 million1,1001,900 Welsh Farm Suppliers LtdFederal Supply Co- operative £33 million12 body corporate) 12 South Caernarfon Creameries LtdMilk Processing & Cheese£28 million250 Farmers Mart LtdLivestock Auctioneering£8 million628950 Dyfed SeedsFederal Grass Arable Seed Processing & Agricultural Chemicals £4 million18 (body corporate) 18 Welsh Lamb & Beef Promotions LtdLivestock£1 million7,300 Welsh Mule Sheep Breeders Assoc LtdLivestock Sales£1.5 million920 Welsh Mountain Sheep Breeders Assoc Ltd Livestock Sales£1.0 million350 Devils Bridge Auction Mart LtdAuctioneering£0.4 million95 Camda Cynwyd LtdDevelopment£2.0 million99 Radnor Quality Livestock Ltd Livestock Procurement£1.8 million730 Primestock Producers LtdProcurement/Training£<0.2 million650 Welsh Livestock Ltd/ Welsh Meat Co Ltd Procurement & Marketing£2.0 million650 Welsh Half Bred Sheep SocietyLivestock Sales£1.8 million850 Miscellaneous Not Active MiscellaneousN/A1000 Livestock Marketing LtdLivestock Trading£4.0 million £232.5 million22,96235,584





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