| Introduction
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Prairie agriculture is facing many changes, including the loss of the
WGTA, the move to vertical integration and contract farming, and the
changes to supply management and marketing boards. The changes to
long-standing institutions create a new framework within which farm
managers must make decisions. The move to vertical integration and
contract farming affect the control farmers have over production and
marketing decisions, while deregulation creates uncertainty and shifts
risk onto the farmer. |
Murray Fulton
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Farm managers require new information to enable them to operate
effectively in this new environment. Farmers now need to understand
chain management and how to position their farm operation in the
distribution chain to minimize the negative impact and maximize their
opportunities. The emphasis on adding value encourages farmers to reach
for profit centres in areas in addition to raw agricultural commodities. |
Adding Value |
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This booklet, materials package, and video entitled New Generation
Co-operatives: Opportunities in Agricultural Processing are designed to
present the new generation co-operative model as a form of producer
ownership of processing ventures. The model enables farmers to pool
resources and share risks to solve problems or create opportunities. By
vertically integrating forward in the distribution chain, farmers can
maintain control over their operations, reduce risk, stabilize income,
and secure markets. | Order your video! |
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In Minnesota, the new generation co-operative concept
has been in place since 1974. At that time, sugar beet growers were
losing the market for their product because the company processing
sugar beets was moving out of the state. In response, sugar beet
growers formed a co-operative, American Crystal Sugar (ACS),
and purchased the processing plant. Since that time, ACS has been
operating successfully, using the features we now associate with the
new generation co-operative. Sugar beet growers recognized the benefits
of this structure and replicated it across the state. Involvement in
the sugar beet co-operatives continues to encourage local farmers to
use this structure to add value to the products they once sold as raw
materials. Stories of the success of these ventures have travelled
beyond the area of sugar beet production and spilled into a wide range
of commodities. It is not uncommon for a farmer to be a member and
director in four or five producer co-operatives and active in the
development process of one or two more. |
American Crystal Sugar
(ACS)
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Conversations with these co-operatively active farmers reveal a
different mind-set and an optimistic attitude. To these farmers, the
co-operative processing operation is an extension of the farm
operation. They are able to retain ownership of their farm product as
it proceeds along the food chain. In doing so, they are able to access
the returns from the processing and marketing of the food product that
results from the processing of their raw commodity. They recognize two
profit centres: the raw commodity and the processed product. They are
able to make decisions and exercise control at both the production and
the processing level. They have learned that collective action
utilizing an effective and efficient business structure can solve
problems and create opportunity.
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