Co-ops tied to future of industry

The role of co-operatives in the fruit industry was discussed at Routes to Retail Success, a free seminar held by the Department of Agriculture and Food WA (DAFWA) and Fruit West last month.

DAFWA senior economist Brad Plunkett organised the seminar as a way of showing WA farmers the options for co-operative business structures, using New South Wales' Batlow Fruit, South Australia's Lenswood Cold Stores and Carnarvon's Sweeter Banana Co-operative as examples.

"Co-ops are a major force in agriculture but they're not very visible," Mr Plunkett said.

"If you look at grain or irrigation in WA it's all co-operative run. In horticultural businesses there are opportunities for them to expand.

"Co-ops also do well in niche markets. In fruit a segment of the market will pay very good prices for a consistent product."

Mr Plunkett said the main disciplines to drive margins were product leadership, operational excellence and customer intimacy.

Guest speaker John Power, chief executive of Batlow Fruit Co-operative in NSW, used the structure and business strategy of the co-operative as a source of inspiration for attendees.

"We're seeing the demise of very small, family-owned operations," he said. "Within five years, if you're not part of a consolidated co-op, you won't be in the business."

Mr Power said although the climatic conditions were very different - 780m above sea level with 1300mm annual rainfall and deep, rich, volcanic soils - the marketing of fruit was the same for WA apple growers as it was for Batlow Fruit Co-operative.

The 90-year-old co-operative turns over $26-35 million a year and members hold shares which are linked to storage access. "We're in the business of growing fruit, we now have our own orchards and the Australian Produce Group, which buys and sells from other growers and sells into our existing market," Mr Power said.

"Our core business still remains our storage and packing operation but five years ago we started Tough Net (hail netting products).

"There's a whole series of things we do for our members - from agronomy to trapping and IPM and tree leasing schemes."

Lenswood Cold Stores follows a similar path with its members supporting them through rural stores, capital investments and orchard management programs.

The co-operative recently spent $6 million on a packing machine upgrade, making it the most technological up-to-date packing shed in the southern hemisphere.

Lenswood chief executive Michael Cox said although it was a huge outlay, it had boosted the bottom line of the business.

"Packing charges have been reduced and the benefits passed onto our growers," he said. "We pack plums for export to Asia and can pack more than 400 tonnes of cherries."

Attendees of the seminar agreed that co-operatives had their place in the WA agricultural industry, especially in fruit and wine production.

Lower Chittering citrus grower Sandy Pate said it was time farmers worked together in specific roles and forming a co-operative was the best way to go about it.

"In Israel you own the land but pool resources," he said. "We need to come back to thinking like that in WA.

"The reason it hasn't happened is we're too independent. You have to work in with other people.

"It's time for thinking outside the square - I'm hoping that after today some co-operation will come to light."