Stimulating cooperation in agriculture and horticulture. Part 1: Opportunities and bottlenecks

Eline de Regt, Anne Vuylsteke

May 2011

Farmers and growers have been confronted with constant change in recent years, both in the food chain and in a wider societal context. These developments require changes in the primary production and have prompted a renewed interest in cooperation and the subsequent added value for farmers and growers. Since the required investments (in time, resources and labour) often exceed the scale of individual businesses, cooperation can prove to be an interesting solution. This report outlines the context in which cooperation alliances are active and provides some foreign experiences.

Opportunities
Change is often the cause of cooperation between farmers, but in the end, any cooperation is expected to yield added value. It is essential that the added value is clear to all partners and can be converted into a joint vision and a distinct strategy. Three groups of targeted added value can be distinguished: (i) improving efficiency and cost reduction; (ii) improving company positioning and (iii) benefiting from complementary competences.

The various forms of creating added value lead to different activities taken up by cooperation initiatives. Increasing profitability through cooperation is especially popular in times of (financial) hardship. Many cases involve joint marketing, aimed at product differentiation. In some cases, cooperation can be necessary in view of mediation and lobbying activities. It is then a means to obtain a beneficial and supportive environment (in a political, economic, technical or institutional sense) for the activities of the cooperation initiative. And finally, cooperation alliances seek to stimulate new developments and knowledge distribution.

Bottlenecks
Apart from the benefit of added value, cooperation also comes with bottlenecks and problems. These usually concern the internal organisation and workings of the cooperation initiative (e.g. time, resources, labour) as well as its operating environment. Involvement in the initiative and trust are two important aspects in the context of the internal functioning of the cooperation alliance, next to access to knowledge and guidance. The analysis of the foreign initiatives shows that (in the field of the environment of cooperation alliances) policy and institutional framework are insufficiently aligned with (smaller) cooperatives. As a result, aspects such as applying and searching for support are considered to be complex and time-consuming.

The role of the government
The foreign experiences show that although the government often plays a supporting role in the context of cooperation alliances, it can also be the cause of bottlenecks and problems.

The government's supporting role can take on different shapes, but there is in general  a need for a stimulating policy framework focused on the manager's entrepreneurship. Bottom line, the interested farmers and growers are the ones who must take the initiative to start up a cooperation alliance, whereas the government is expected to create the appropriate prerequisites.

The importance of the support differs with the cooperation phase, with a clear peak at the start. The best moment for the government to assume a (supporting) role is at the start of new cooperation alliances. Support, be it financial or non-financial, appears to be of the essence for cooperation initiatives.

There are different ways for the government to materialise its supporting role. These aspects are discussed in the report: 'Stimulating cooperation in agriculture and horticulture. Part 2: Opportunities in the scope of the European Rural Policy'.

Original version:

Eline de Regt, Anne Vuylsteke (2011)
Stimuleren van samenwerking in de land- en tuinbouw. Deel 1: Mogelijkheden en knelpunten voor samenwerking
Department of Agriculture and Fisheries, Brussels.


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