Grower co-op looks to improve returns

The Stirlings to Coast Farmers (SCF) group, which is behind the Great Southern Agricultural Co-operative proposal, can begin feasibility studies for lamb feedlots and a feed mill, expected to be the proposed co-operative’s first two regional projects.

The group is also partnering with the Australian Export Grains Innovation Centre (AEGIC), other grower groups and the University of Western Australia to design a new generation co-operative enterprise that will provide more flexibility and returns to grain growers and livestock producers across the region.

The Great Southern Agricultural Co-operative concept will be officially launched at the SCF and WAFarmers’ Livestock 2017 event at Kendenup on July 21.

SCF chief executive officer Christine Kershaw said it was hoped SCF could register the co-operative within 12 months with an investment prospectus published and members invited to join within 18 months.

The co-operative would then be “spun off”, Dr Kershaw said, as a separate entity to SCF, but would continue to be supported through SCF’s research programs – the group has primarily had an agriculture research focus since being created in 2009 by 12 southern farmers.

Membership of the proposed co-operative was expected to be open to all farmers in the Great Southern region and would not be restricted to SCF members.

Canvassing of local farmers for their views and potential support for the co-operative proposal and feedlot and feed mill projects was about to begin, Dr Kershaw said.

“SCF has an agribusiness manager starting in four weeks and part of his role will be to oversee the farmer consultation process and the feasibility studies,” she said.

In the meantime, SCF project officer Victoria Bennett will continue to work on the feedlot feasibility study which has a tight funding time frame.

The SCF received $140,000 from the Federal Government’s Farm Co-operatives and Collaboration Pilot Program for six months’ work on the feedlots project.

Dr Kershaw identified the feedlots feasibility study as the priority because of the funding timeframe and potential for the project to attract future funding.

Up to 18 months has been allowed for the feed mill feasibility study with $495,000 provided by the Grower Group Research and Development Grants Program from the State Government’s Royalties for Regions Seizing the Opportunity in Agriculture Fund.

Dr Kershaw said local feed suppliers had run short in the past week in the region, demonstrating the potential for a farmer-owned mill to be successful.

She said it might be possible at a later stage to further establish a processing plant for a wider range of grains and ultimately for processing food products, such as instant noodles and biscuits, for human consumption.

Given the farming mix of the Great Southern, a lamb feedlot and associated feed mill were considered to have the best potential to create a regional brand identity and capture a greater share of high-value domestic and export markets, she said.

Collaboration between local farmers through a co-operative will create efficiencies of scale and value, resulting in between 30 and 40 new local job opportunities, Dr Kershaw said.

SCF has been working on the co-operative model and projects for the past 12 months and had already formed strategic alliances to help develop the projects.

Great Southern local councils and the CSIRO had also “come on board” and would be involved in planning and site selection processes, determining potential transport routes and whether roads might require upgrading, she said.

The feedlot and feed mill projects complemented each other but “one was not dependent on the other”, she said.

They would be assessed individually by the feasibility studies being undertaken by SCF staff and consultants.

Continuity of supply and product quality would be critical to the success of either project, Dr Kershaw said.

Each would involve the latest technology in design and operation – some of which stems from the SCF’s research – in animal handling and verification systems and incorporating risk management for climate change affects on cropping.

Dr Kershaw said she is excited about the co-operative model which will give local farming families an opportunity to take a bigger and potentially more profitable role in the food supply chain.

“This model minimises the requirement to take on significant additional financial burden, or amalgamate individual holdings, but enables sufficient scale to carry out value adding projects,” she said.

“Members of the co-operative will be enabled to add value to out-of-specification grains that fail to make top grade through feed milling.

“It joins the dots between grains, livestock and value chain partners in a way that I believe is unique and should be a signature project for government as an example of thinking beyond the farmgate and co-ordinating value adding efforts for mixed farm enterprises.

“Most importantly, this is farmer driven – a local producer solution to complex issues that government is supporting.

“(It is) a true partnership where policy hits the ground in a really positive way to incentivise farmers to be proactive in taking that opportunity and running with it.”