Cooperations: The best model for price and position for farmers?

In 1997, the pig farm of my parents was hit by the outbreak of classical swine fever. From that moment on I knew I wanted to fight for a better position and image of the pig farmers and the agricultural sector by becoming politically active. I studied public administration and wrote my theses on intensive livestock farming. After my studies I worked as a policy officer in the European Parliament, Ministry of Finance and the Dutch Parliament. Especially during my period in the Dutch Parliament I learned what the steering mechanism are like in the various agricultural sectors. From a centralized cooperative management in dairy farming to public-private management in greenhouse horticulture, from uncoordinated management in pig farming to a fully integrated chain in veal farming.

This knowledge was very useful when I switched to the Dutch Pig Association as chair. My main mission in this role was to improve the position and image of the pig farmers by setting up a producer organization of pig farmers (POV) and structuring it according to the cooperative model. By working together in a cooperative, more can be achieved for the individual pig farmers than in the current situation of a fully dependent position which the Dutch pig farmers find themselves in. Trough Nuffield I got the opportunity to learn more about the cooperative model and how they are organized in different countries. Because of background and my practical experience within the POV and my involvement in the farm of my parents (pig farming) and husband (arable farming), I have chosen to focus my research if the cooperative is the best model to realize a better price and the position of the farmer in the chain. I focused in this research on arable farming and pig farming.

Because the world was hit by a pandemic in 2020, I was only able to do a personal trip to France. The pork chain in France was the heart of the trip. Arable farming was not a part of this trip. In 2019 I took part to the (pre)Contemporary Scholars Conference in London and Iowa and the Global Focus Program China: a trip around the world. I visited the following countries during this trip: Singapore, Philippines, Hong Kong, China, Germany, Ireland, USA (Washington DC and Texas). To find answers to my research question, I will highlight the Dutch situation based on a short literature study and interviews with cooperatives in arable farming and pig farming in the Netherlands. My conclusions and recommendations are based on my travels, desk research and interviews.

My study shows, based on my travels, desk research and interviews, that the cooperative model is still the most appropriate one for joining forces in the agricultural sector. A cooperative is easy to set up and does not have to be large. Despite my focus on big agricultural cooperatives, in my work for a rural development foundation, for example, a small number of businesses work together in short supply chains for the sale of local products. Cooperatives are gaining popularity in different sectors like healthcare and energy and in the region. A cooperative is for farmers a fantastic tool to market their sustainable products.
Although the cooperative model may be the best model, the cooperative models need to be reformed. The last years Dutch cooperatives emphasized the business interest in stead of the interest of the members. Sometimes decisions are not well explained to the members how certain considerations have been made. Running a cooperative is difficult. Finding a common interest, pursuing the long term without losing sight of the short term, generating mutual solidarity without losing the business acuity. And then a large and diverse membership base is a real challenge, often in a sector under pressure. Because this is what we needed now: tot he put the members' perspective first, work together and forming a strong collective. The member side of the cooperative must be strengthened again.

The balance in cooperatives between company interests and members' interests must be in balance. The structure of the governance of a cooperative must be well structured: from decision-making, the right councils (such as the members' council, board of the cooperative: supervisory board and management) and the right people in the right places. It is important that decision-making people in the cooperative organizes “countervailing power”: be able to deal with or organize countervailing power. They must question each other critically and there must be a safe environment where can be said if something is not understood. In a cooperative members must be the goal. If the business interest is greater than the members interest, the functioning of the organization must be reconsidered.

The cooperatives in arable farming act properly as far as I can see. It is a challenge for these cooperatives to find the balance between the interests of the company and the interests of the members. A recommendation for the cooperatives in the sector could be to exchange knowledge and experience in order to learn from each other. Every big cooperative has to deal with the same challenges.

There is still a world to win for the Dutch pig sector. During my trip to France, for example, it emerged when the price is determined, Dutch market information is not taken into account because the market is not transparent. The research “Support for Farmers' Cooperatives” (2012) shows the European pork market is highly integrated, but that does not apply to the Dutch situation. The position of the Dutch pig farmer remains very weak. Despite, the Dutch pig farmers perform still well. Therefore they deserve a compliment. After this research I’m still convinced that the POV should be expanded further into a cooperative of pig farmers.

I would like to call on individual arable farmers and pig farmers to to make their own considerations and decisions in your business operations and towards the future, based on the advice and tips you receive from the advisers around you. Nuffield has definitely broadened my horizon. During my vision I’ve reached the conclusion when I was POV and NVV chair my view had become very limited. It is important as a farmer to no stick to your own bubble and organize “countervailing power” outside your inner circle.

©Ingrid Jansen