Online Co-Op Tool Attracts Agri-Businesses

As many as 70 agri-focussed businesses have started the process of becoming a co-operative in the first month of the introduction of an online co-op builder backed by the Australian government.

The free DIY builder, developed for the national Farming Together program and launched in June, is being used by farm groups across the country.

Farming Together is a two-year, $13.8 million initiative from the federal government designed to help agricultural groups value-add, secure premium pricing, scale-up production, attract capital investment, earn new markets or secure lower input costs. The program is being delivered by Southern Cross University on behalf of the government.

Farming Together project director Lorraine Gordon said: “People don’t realise how simple it is to form a co-op. You only need five people.

“A co-op structure has so many benefits – including tax benefits. Co-ops help secure discount bulk pricing for farm inputs. They traditionally underpin equipment and infrastructure to value-add primary production. And we are seeing a growing appetite for co-operative marketing structures,” Gordon said.

Developed in conjunction with Australia’s peak body for co-ops, the Business Council of Co-operatives and Mutuals (BCCM), the online tool has been written by leading experts in co-op law and education.

CEO of the BCCM Melina Morrison said: “This is a monumental step forward for the development of co-ops in Australian agriculture – and for the entire co-op sector.

“Recent government inquiries into business competition have recognised that co-operatives are an important way for small, regional and ag-based businesses to compete in markets that favour larger players,” Morrison said.

One group of niche truffle farmers in NSW and the ACT have established the Eastern Australian Tablelands Truffles Cooperative or EAT Truffle in NSW with the assistance of the Farming Together program.

Tricia Lockart, one of the directors of EAT Truffle told Pro Bono News that 10 family-based truffle farmers had united to form the cooperative.

“Sharing resources and a common and rigorous set of standards, we can bring our amazing product to market in a more cost effective and timely manner than ever before,” Lockart said.

“We spent quite a bit of time with Cooperatives NSW giving us advice and then we got consulting hours through Farming Together from various areas from packaging to legal issues to website and marketing and things like that.

“So we were able to call on those expert consultants and there was no charge to the co-op for doing that as it was part of the Farming Together service. We have not only learnt a lot about what is required but they have obviously given us assistance to get us better exposure that has assisted us to get our first sale.

“By the time we got our website and other things up and running we were a bit late for the start of the truffle season but we still managed to get our first sale and had a few distributors that have been interested.

“In that regard it has been good for me as a grower and a member of the co-op to find a market for my truffles and a local market. Because I have had some people interested in the past that looked at exporting truffles whereas I always had quite an interest in our local market using the truffles that we grow in Australia.”

Lockart said the truffle farmers were located in the central tablelands around Bathurst, Orange and Hartley as well as the southern highlands of NSW.

“All the growers are family growers and so very small. So a lot of them are in over 50’s category as well where they have done this as a bit of a hobby and don’t all have the expertise to go door knocking at restaurants to try to sell their truffles. So we all have a similar interest in having one central person do the sales and marketing and keep that quality consistency there for us all to rely on.”

Lockart said she planted her trees 10 years ago and this was her third winter harvesting truffles and the first one through the co-op.

The 2015 Harper Competition Review recommended that raising awareness of co-operatives would promote their use and potentially strengthen the bargaining position of small businesses dealing with large businesses.

And the 2016 Senate Economics References Committee’s inquiry into co-operatives recommended that it should be easier to set up and run a co-operative in Australia.

The free template is available from the Farming Together website. The template makes it easier to put together the key paperwork to register as a co-op, shows how to write a compliant constitution and a disclosure statement (how the co-op will put the money together from its member investors).