Pete Lewis:
Welcome to Co-operative Conversations, the livestream series where we connect you with the real stories from Australian primary producers who are working and building their businesses together co-operatively. Hi I’m Pete Lewis, and one way or another I’ve been helping Australian farmers tell the great stories of food and fiber production in this country for far longer than I care to remember, but I’m really excited to be involved in this project, and we’ve been going now for eight programs and we just seem to be building up a head of steam and some momentum and getting some great insights from the people who have created and sustained agricultural cooperatives in this country.
Pete Lewis:
The roundtable discussion tonight is a particularly good one because it is centered on the most important particular parts of the co-operatives, and that is about people, and we have got some very experienced co-operative people to help us through our chat. Now, if you were with us earlier, and you should have, because it was a great conversation we had with Emma Robinson from the Beef Collaboration Project near Charters Towers in north Queensland, and she was talking about the real importance of family farming, and why co-operative farming has been such a crucial model for them to underpin the Collaboration Project.
Pete Lewis:
It’s an excellent springboard to talk about how to attract and retain members. Now, joining us are four agri-business leaders in their own right who are working with co-operative models right across Australia. We have Kate Davies from the Tooraweenah Prime Lamb Marketing co-operative at Coonabarabran in New South Wales, a spectacularly beautiful part of that state. John Secccombe is the chairman of the Northern Co-operative Meat Company in Casino, also in New South Wales, and we welcome back Emma Robinson, she just can’t get enough of this caper, founder of the Beef Collaboration Project in north Queensland, and that slight giggle you heard in the background is BCCM CEO Melina Morrison. Welcome one and welcome all, and that you very much for your time, and we look forward to a good chat with you all.
Pete Lewis:
But before we get there, we have a burning question as a result of tonight’s topic, ask away to our online team, if you have a burning question that is. Ask away to our online team, they are standing by as we speak, via the chat box which is located to the right-hand side of this stream, and don’t forget you can also vote for a question via the vote button, so the most popular ones will obviously be the ones we get to first. We’ll try to get to as many of them as we can in the time that we’ve got during the stream. Now as we said, when we had the discussion with Emma we heard about the importance of family farming to the Australian economy and to the business of beef which she’s directly connected with.
Pete Lewis:
Emma, let’s hear from you again. You spent a lot of time working on the model, and for people who weren’t involved earlier, a little precis of the journey so far and why you chose a co-operative approach.
Emma Robinson:
Thanks Pete. Well I think a co-operative approach enables us to be more than farmers, so it enables us to leverage opportunities beyond the farm gate, and do that with others, so share the risk of getting into new territory, but also you know, leverage those opportunities. I think you know, there’s lots of examples of producers driving those opportunities themselves, but I don’t think we can all be in that space, and I think particularly in beef, there’s a lot of us in those medium-sized enterprises that have reasonable scale that don’t want to take all the risks themselves, and so are really interested in how they can work with other producers that have a similar value to leverage new value, whether that be buying inputs collectively, you know, sharing costs, so sharing costs around how we implement business systems, and also looking at how we can better optimise our cattle production and get into the supply chain.
Pete Lewis:
You have the advantage I guess, or … yeah, I guess you could call it an advantage, you were an agricultural extension officer before you leapt into this exciting new area, and you also were awarded a Churchill Fellowship to go abroad and have a look about how some very successful ag co-operatives worked, how important was that for your journey?
Emma Robinson:
Look I think there was a couple of key things there, I think experiencing the drought and the frustration around that, and you know, I talk about our life at the end of the food chain because that’s really where we felt like we were, that motivated me to apply for the fellowship and really get out there and see what other family farmers were doing. You know, how were they building profitability? What were they doing to make sure that their business model was enduring, and I think you know you can’t do a Churchill Fellowship and get all those great insights and come home and do nothing.
Emma Robinson:
You’ve got to do something with that knowledge, and that, you know, motivated me to take the next step and set up the co-operative project, and I think you know, the timing was really right, you know, there was seed funding available through the Farming Together Project funded by the federal government, and I think there were just some significant changes happening in our external environment that mean you know, the time for cooperatives is now, you know, there’s opportunities out there for farmers to leverage new opportunity that didn’t exist 10, 20 years ago. So I think there’s things changing around technology, around consumers and how they want to connect with farmers, that’s really an enabling factor in making co-operatives work.
Emma Robinson:
So I think that’s kept the momentum going for us.
Pete Lewis:
Melina, not everybody gets an opportunity to win a Churchill Fellowship, or indeed travel extensively and get to know other very successful co-ops, why is it that perhaps this very, very successful and sustainable way of farming doesn’t get more publicity, more knowledge, are we hiding a light under a bushel so to speak?
Melina Morrison:
Well that’s right Pete, not everyone has the opportunity to go as far and to explore different business models as Emma did, and we’re really proud of the studies that Emma’s done and brought back that knowledge to Australia, but the business model is discriminated against a little bit, it’s not taught to accountants, it’s not taught to lawyers. When you go and study an economics or a commerce degree you’re unlikely, unfortunately, to study cooperatives. That is changing, but it does create an information barrier, and unlike you Pete, not all journalists know what co-operatives are, so we look forward to the future where it’s just as likely that when you go to set up a business the accountant’s going to say, “Well you could be a company, a partnership, a trust, or a co-op.” And it’s just normalised in that way.
Melina Morrison:
And things are changing, and you know, thanks to the Commonwealth government’s investment in education through Farming Together and this program, you know, we’re really starting to turn the tide.
Pete Lewis:
Excellent. Now listen Kate, talk us through the Tooraweenah Prime Lamb story and how the co-operative approach particularly works for, I guess, I group of farmers you might regard as sort of rugged individualists and maybe a little averse to clubbing together, they might see one another as competitors rather than collaborators.
Kate Davies:
Yeah farmers are bits of isolationists Pete, but I think really it’s all about the bottom line, you know, money talks. So nearly 25 years ago the Tooraweenah Prime Lamb Marketing Cooperative, we’ll just call it Tooraweenah Prime, was set up, and it was really … as Emma said, it was part of change. At the time there was huge seasonal fluctuations in the prices of lambs at the sale yards, and so it was set up in a bit to just sort of even those price fluctuations out, and forward selling had been started, and you know, the cotton industry was into it, there was beef futures at the time, you could do orange juice in the future, but you couldn’t tell lamb, it was about negotiating prices and co-operatively we could sell more widgets of course, but also we could load share transport.
Kate Davies:
So for sort of medium-sized producers that was fantastic. So producers who didn’t have enough lambs that week to fill a B-double or a road train could load share and we would put a bigger truck around with say, a milk run, and send it off to the abattoir that had the best price on offer. So it was sort of … you know, it was no change for anyone except the farmer who got a better farm gate price.
Pete Lewis:
Give us an idea of the scale you’re talking about, how many members do you have?
Kate Davies:
About 90 farming families. So they’re not all … they’re all farming families, but they’re not necessarily family farms, some of them are employees. As you say, you know, farmers are bits of individualists, but yeah, just the amount of difference that it was making just grew, and grew, and grew. So we don’t charge a commission, we charge a flat rate. So when the prices are high, it’s the bottom-line at the farm gate that is talking.
Pete Lewis:
John, what was the background to the Northern Co-operative Meat Company? What was the need that you were going to attempt to meet?
John Seccombe:
Sure, thanks Pete. The co-operative was set up in 1933 through basically a market failure. Producers in this area were selling their produce in the city market, and they realized that individually they weren’t receiving just returns, so they’ve bonded together, formed a co-operative with the belief that they could profit or share in their toil, and in fact that ethos grows through to our business still today, that we try to work together with our members to build a better outcome. But basically through a market failure, and that’s why people bond together Pete, is to overcome a perceived market failure.
Pete Lewis:
Now is it a fair observation to suggest that cooperatives in Australia, the ones with significant profile and significant numbers and scale, tend to be more in things like dairy and grains and other commodities, is there a reticence among red meat producers, or beef producers in particular to co-operate?
John Seccombe:
I think the basic problem for co-operatives in the red meat and the livestock industries is that we operate in a free and open market. Producers are able to market their produce at various outlets at various price points, and at the end of the day, you’re right, we are very competitive, and bringing them all together under one roof to say, you know, “We need to work together,” is very difficult, and especially when times like now, when a sector of the market is paying in excess of what can be achieved through the processing of animals, you know, members would naturally go to the higher priced market.
Pete Lewis:
Look, in my experience I’ve never met a beef producer yet who doesn’t think the next guy down the chain was actually getting all the money, so I guess that’s one of the things you need to satisfy that-
John Seccombe:
Correct.
Pete Lewis:
You’re actually … to use that hackneyed phrase which is getting a beating during the pandemic, “We’re all in this together.”
John Seccombe:
True, and you’re right, we’ve had members join us because they wanted to process their animals thinking that they could get a greater slice of the pie, thinking that the money was post-farm gate, but they’ve come back many years later and said, “Well actually it wasn’t there, but what they got was far more information on how to run their business,” and the profitability then becomes through the whole supply chain, rather than the one sector of it.
Pete Lewis:
Kate I guess attracting members in the first instance is significant, I guess the trick, the longstanding ones like John’s co-operatives hanging onto them, keeping them in the tent. What have you found out on your journey that really works to keep everybody in?
Kate Davies:
It is, you’re right Pete. Look I really think that it’s the bottom line as well as … you know the old adage that, you know, your bank is only as good as the bank manager that’s in your town? I think a lot of that applies to a co-operative keeping members. We have always members who don’t trade, they’ve gone out of sheep, but they still remain members, and I think a lot of that is for the information that we give in regular newsletters and that sort of thing. We have field days and those sorts of things, but I think it’s about … for those particular members I think it’s about keeping their fingers on the pulse, for the members who are trading … the members who aren’t trading, there’s only a handful of those. It blows my mind that they still want to stay though, and I think for the members who are staying and trading, I think that it’s about administration and service and just, you know, delivering the goods, you know, delivering what we say we’re going to do when we say we’re going to do it.
Pete Lewis:
Now one of the interesting things that emerged in our chat with Emma, was that in the Beef Collaboration Project up there in north Queensland, there is a pretty wide variety of skillsets that have become involved in that particular project, Emma do you think that hybrid vigor is one of the really successful and important parts of your operation?
Emma Robinson:
Certainly when it comes to buying bulls Pete, yes, but I guess you know, I think the fact that if you look at agriculture, you know it can be considered a fairly homogeneous population, so without a doubt you know, we’re looking for people with different ideas, with different backgrounds, with different skills, and that’s going to create different thinking around what we’re doing. So you know, even to the point of, you know, we’ve all had conversations with our kids about what this project’s about and about the opportunities, and I think that’s part of being future-focused and about building an enduring model, so definitely we need hybrid vigor in the beef industry.
Emma Robinson:
I mean we need people from different walks and talks, I mean we need that diversity to get those new ideas and those new opportunities that are out there.
Pete Lewis:
John, what’s the secret to keeping your members engaged and focused, and I guess critically, how do you reach consensus among, I guess, an ever-enlarging, ever-increasing sort of body of members in a co-op as it goes through to maturity?
John Seccombe:
Well I think it’s a simple formula Pete in that communication is the name of the game at the end of the day. Sure, we offer a service, we try to be price competitive on our service delivery, but at the end of the day people that need to believe in what you do, you need to communicate what’s happening in the business, and engagement, yeah, I mean that’s a new thing for us, we’ve only really undertaken that in the last three or four years, and we’ve been very, very encouraged by the uptake of members of some of our programs we’re delivering to improve on-farm productivity, to improve environment outcomes, and also to understand the supply chain.
John Seccombe:
Because one of the biggest problems we have as a producer in the beef industry, is that brick wall that goes up when you load your cattle and no one knows what happens after that. At least being part of a cooperative, even if you don’t take that risk on that Emma was saying, but you get the chance to look into the business and see how it all works.
Pete Lewis:
Kate’s members are having such a great time they don’t even have to have sheep anymore to stay in the game. What’s your tune like? Are you hanging onto people and expanding the cake?
John Seccombe:
Unfortunately yes and no, but unfortunately under the new co-operative national laws the onus of being a member is now very tight, so people have to be active with the co-operative every year, and in times like now when the cattle market’s gone crazy in the stockmarket, members don’t supply, so they lose their membership. So yes it goes up and down, but we’re also attracting people that have a greater number of cattle that want to get into that total supply chain scene, and so yes we’re losing some members but we’re gaining others as well at the same time, and also got…the issue on consensus, one of the benefits we have is a one member one vote system, so even though you may be quite a large corporate player, you’ve still only got one vote to a person that has ten cows, and so consensus comes a lot easier because there’s no self-interest or dominant player in the business.
Pete Lewis:
And do you tend to find you get more inquiries when things are tough rather than when the market is red hot like it is now?
John Seccombe:
Yeah, when things are tough on the land, you know, droughts for instance, and we’ve been through a couple in the last few years on the eastern seaboard, yes we do get a lot of inquiries, and especially building cooperatives because of this market failure, because cattle prices slump, but … and also we get offers to buy the place, I have people coming out of the woodwork wanting to buy the plant because they can see you’re making a lot of money, but come along 12 months, not even 12 months, you know, the reverse is happening in our business at the moment, we’re losing a lot of money.
John Seccombe:
And the inquiries are not as strong now because you know, there’s alternative outlets, but certainly the people who want to get in the supply chain take a longer view, they look further out than, say, to the next rain event. So when you’re doing that you do take the ups and downs, of the livestock market into account.
Pete Lewis:
Melina there’s a virtually unimpeachable argument that there is strength in numbers, but what sort of due diligence should cooperatives do before they go out and recruit and seek to build up, you know, a body of members.
Melina Morrison:
Well this conversation is really fascinating actually Pete, I’m really enjoying the discussion about the value of information flow, business intelligence networking, that’s often overlooked. We talk a lot about the scaling impacts of co-operatives, you know, team up to clean up, which is true, but there’s this other inherent value add which is when you break down the information walls and you can share information, you can actually add profitability to the bottom line as Kate said, and you know, sometimes when someone else owns the supply chain, putting up barriers actually is something that serves, you know, a different type of owner, so we absolutely need to look at that element of co-operatives just as much as sort of lowering price inputs and scaling to be able to get into export.
Melina Morrison:
Co-ops have to do due diligence through their business plan. Members are at the center of the business, and they’re absolutely fundamental to how you capitalise the business, and whether you can actually have enough patronage or turnover to make it a going concern. So it’s not a personality test going out and getting new members, it’s actually based on, you know, the potential member seeing whether there’s any benefit in joining, and whether they’re going to meet the active membership tests, so can they actually do their bit of the bargain, and on the other side the co-op has to … it’s a legal requirement, you know? It’s about disclosure, and members should read the disclosure prospectuses, and just as much a business has to have a transparent business plan and that’s what you’re buying into.
Pete Lewis:
Now look as we’ve seen in the previous episodes of this series, existing and well long-established cooperatives are only too happy to share the hard-learned lessons of their own story with prospective cooperatives. There’s a generosity and an esprit de corps which you don’t often find in business to be honest.
Melina Morrison:
Yeah absolutely. I mean this is … it’s not just a kind of feel-good vibe, it’s actually in our constitutions. The seventh co-operative principle which is globally adopted by co-ops around the world, is enshrined in the constitutions by law in this country under Co-operatives National Law, so that co-operation amongst co-operatives, and again, it’s this idea I guess of having a business reason, you know, enlightened self-interest reason why you would actually co-operate with each other in order to increase your foot in the supply chain. So it’s not … you know, it’s often motivated by doing the right thing, but it’s also motivated by commercial instinct, which is really important, because that’s what’s going to drive the ongoing engagement.
Pete Lewis:
Emma you’re, I guess at the entry level, a part of this discussion and you are trying to recruit people who’ve got as passionate and interesting family farming as you do, how’s it going and what’s the big pitch when you go to people and say, “We’ve got this idea, we’ve got this collaboration project underway, and we think you could benefit, and so could we”?
Emma Robinson:
That’s a great question Pete. I guess for me it is all about the why, so there’s the old adage that people don’t buy what you do, but they buy why you do it, so our why is all about family farming, and the belief in family farming. So we talk about wanting to have the scale and capacity of a large corporate with the integrity and innovation of a family farm. So it’s about communicating that why, and that’s got to be, you know, simple, you’ve got to be able to quantify it in terms of what you’re doing, it’s got to be actionable, so we try and break it down into sort of key steps of value we’re adding, and it’s really got to be focused on what you can contribute to other people’s business, it’s like Kate said, you know, it is about that bottom line.
Emma Robinson:
And that’s not just about income coming in, that’s about saving your dollars, that is about … you know, that’s about knowledge and insight that can make you do things better at home, and we’re probably a little bit different in that we don’t see the opportunities as simply you know, selling our own cattle or branding our own beef, we’re really looking to see how we can add value through different kinds of relationships, we want to work differently with processes. How can we add value to what our processor is doing? How can we work together? And I think that’s the future, we’ve all got challenges, as John mentioned.
Emma Robinson:
So I think that’s what we’re about, and I think if you get the why right, particularly in those initial stages, it really helps you in recruiting members. You get members that are … you know, are happy to give their time because they’re buying into that why. So they’re often happy to do, you know, some of the leg work, they’re happy to apply their skills because they’ve bought into the why. They’re also happy to bring in other members because you know, they tell the story, they feel the story, and I think they’re also important to go the long distance. So when prices are down and they might do better elsewhere, they’re happy to ride it out because they really believe in that bigger story.
Emma Robinson:
So I think you know, it is about that why. It’s about, you know, at the end of the day what you’re about, and being clear on that helps you find value, and there might be other ways. You know, the power of networking, the power of insights as Kate and Melina have mentioned. You know, there’s other ways a co-op can add value, not just pooling inputs. So I think that’s an opportunity we’ve got now.
Pete Lewis:
Well John West used to say it’s the fish they reject that make them the best, is it sometimes an issue of being very selective about who you invite? And sometimes even, you know, turning people away?
Emma Robinson:
Look I don’t think we’re at the stage where we’re turning people away, but I think the process itself defines the kind of people we get. So if you’re clear about your why and you’re clear about the model and what you’re doing to add value, people either get that or they don’t. So I think it’s a bit of a self-selection at this stage, and that’s great because it means I get the people that want to be there that are buying into that proposition, so you know, that’s really important. We’re not about rejecting anyone but certainly the process self-selects. People that can’t commit to that why, you know, aren’t signing up.
Pete Lewis:
Kate, an old farmer once told me that if farming was easy everybody would be doing it. How do you basically keep the messaging up to your members and those lines of communication to them when they are particularly in periods of stress and under … and anxious about where the next cheque’s coming from, and when the next rain’s going to fall?
Kate Davies:
Yeah Pete, it’s so important, communications is everything. It’s about … well it’s about as important as you know, delivering that bottom line really. We have a weekly dodger, you know the old-fashioned one page newsletter that goes out, that keeps everyone abreast of prices, where the prices are, and what services, a bit of news, just one page in an email. We also put out other information as required, from other sources, MLA, and other sources about best practices, particularly if there’s, you know, stuff going on like a plague of locusts, a plague of mice at the moment, you know, stuff. Also we have a field office. We’ve only got one employee and he is the face of our co-op.
Kate Davies:
So he’s the one who assesses all the livestock, it’s not just lambs at the moment, it’s cattle as well, so he goes around and his full-time job is to assess all the animals, but he speaks to our members and so yeah, he’s the face of our co-op, but he’s also a great communicator and that’s what it’s about, yeah. So we have … that’s not true, we don’t have one employee, we have two. We have our business manager and she’s on the phone all the time, so she’s the other one as well. It’s all about communications, it’s vital.
Pete Lewis:
John, does it get trickier the larger you get and the more members you’ve got balancing all those needs, because I imagine from an emotional point of view they’re all at a different part of the cycle, some of them will be doing better than others and you can’t assume that, well, one message is going to fit all and satisfy them all. How tricky is that?
John Seccombe:
Only that you need to be consistent in your messaging to your members. Sure, as the business grows or diversifies you get a diversity of members, and it’s just a matter of understanding their various needs and communicating to those needs. Yeah, I don’t see it being tricky, it’s just having good, open, honest, and transparent communication with their members.
Pete Lewis:
One of the interesting things that we’ve heard in the course of this series is that you don’t necessarily have to be a beef producer to work at a beef co-operative or run one for that matter, and vice versa with lamb or lobsters or anything really. Have you found that getting some fresh blood in, some fresh eyes, and fresh perspectives has been pretty good for you guys?
John Seccombe:
Certainly the management team really need to know processing, especially meat processing. It’s a very specific industry and there are advantages if you’re able to be in front of the market in some of the things you do on the plant, so the advantage is having a strong background in red meat industry. Having said that, a good CEO from any industry who’s involved in processing and understand the concept of input and output, could probably run an abattoir. As far as the boards going, that’s very interesting, we for the first time have brought on an independent director a few years ago.
John Seccombe:
We have produced a…we’ve produced a board elected by the members, so we’re all producers, and to bring on an independent who’s come in from left field, as you say, has been very invigorating for the board, a fresh set of eyes, a different concept on … especially corporate financing, all those sort of aspects, a different outlook than we have. So yeah, that’s been very, very good.
Pete Lewis:
Melina, it’s really critically important to have good leadership in any enterprise, and I guess because of the nature of cooperatives you really need a board which is very actively involved and management that is also tuned to all those things that we’ve been talking about, the communication side and just the operating capacity of the business?
Melina Morrison:
Yes absolutely, and just reflecting on what John said, you know this is a member-centered business model, let’s not forget that. So it’s really imperative that the members’ mindset and interests, because it’s about benefiting members, is at the board table, but just like any business, as the complexity of the business grows, as the scale grows, you have to bring in other skillsets in order to run your business. It always fascinates me though that people think that this is different in co-ops. Don’t forget that Mark Zuckerberg started Facebook in his university dorm room.
Melina Morrison:
It’s a slightly more complex business now, and it probably does have a global board, and co-ops are no different, except that in order to stay member-centered, you know, they must always have a majority member governance, because ultimately that is the purpose of the business, and a really good exec team management, whether it’s two people or 200, depending on the scale of your business, is going to execute the strategy that is member-endorsed, it’s their strategy to be executed by the management team.
Pete Lewis:
It’s interesting probably I guess there’d be people who probably hoped Mark Zuckerberg had stuck to his university studies or studied something else, but anyway. Emma, you told us earlier than you’ve actually spent a fair bit of time actually studying the structures and the options of the co-operative approach, from your experience so far with the beef collaboration project, how important was it to get the structure right when you established it, and how important is it that you work on that structure, I guess, almost continuously?
Emma Robinson:
I think it’s really important. So we’re not at the co-operative structure yet. We’re working towards that, but I think the structure we’re looking for is one that really maximises value for members, and there’s a couple of attributes I guess that we’re looking for, so we want the structure to acknowledge the work of the founding members so we can do that in the way we look at our shareholdings, and the cost of those shareholdings. We want the structure to be enduring, so it’s got to be future-focused, you know, we want it to last the distance. I think what’s important though is that, you know, I don’t have to be an expert in cooperatives to set up a cooperative.
Emma Robinson:
Yes I’ve done some of my own work, but I certainly wouldn’t count myself as an expert. What’s great is there are resources out there, so there’s groups like the BCCM, while Milena’s CEO of, there’s also co-operative specialists that you can get access to. So there’s legal experts around co-operatives, there’s financial experts, so I don’t think you should go into co-operatives feeling like you’ve got to have all the answers. I think you’ve got to focus on what’s going to maximise value for members, and create a structure around that, and get advice to help you put the right structure in place.
Pete Lewis:
Thanks for that. John, how does your structure work? You might be able to give Emma a few clues as to maybe what she needs for hers. How does yours work, and how do you get your members all on the same page?
John Seccombe:
Sure. Our structure is a little bit unique I guess, we have two types of members, we have our producer member who’s obviously involved in the production side of livestock and supply the co-operative cattle. We also have an operator member, who then … earlier on we were talking about the carrying on of risk, who will then take that risk of converting those … processing those animals, having them boned, packaged, labeled, and then marketed to all the markets around the world. So that operator then, under our structure, is the only … a producer member can’t do that, he must be an operator member as part of our by-rules. So it’s a little bit unique in that way, and so producer members supply the operator members, yeah.
John Seccombe:
But we have two plants, specifically the beef plant and the pork plant, and well we employ 1,000-odd people across those two sites.
Pete Lewis:
Kate, how did you go about it? Did you look over the fence at another co-operative that was doing the same thing you do? Or did you look right outside your operating area to get a model that works for you?
Kate Davies:
It was before my time to be honest, but there exists still a Lamb Producer’s Co-Op in Western Australia, so we looked at that, applied a scaled-down version, decided that it would work, and went from there. So it was … as Emma said, it was, you know, define the problem and work on that and yeah, it was … yeah, it actually didn’t take that long comparatively to put together.
Pete Lewis:
And I guess Melina, as some of these co-ops in Australia have been around for a very long time and John mentioned his from the 1930s, but some go back even longer than that, they’ve got some track record, they’ve got a lot of success, sometimes you also learn as much from your failures as your successes, so there is a body of knowledge that exists about how they run.
Melina Morrison:
There certainly is, and it’s handed on inter-generationally as well as across co-operatives. We’ve seen some great collaboration recently. We’ve got a fantastic collaboration going on through our Farm Champions and Mentors program, so that’s, you know, good people like John actually going out there, giving his time, his experience to share with other farmers who want to go on the journey, but there’s a lot of trading of information, constitutions are used and reused across different commodity areas. In many ways that’s sort of deceptively simple, but it’s based on this idea that you know, stronger together, really. By co-operating we might actually unlock another potential for ourselves to grow commercially, and the sharing of this business intelligence.
Pete Lewis:
To our questions now, and there’s a couple of doozies here, but we want to encourage you if you have a question for tonight’s topic, make sure you ask it via the chat room, and people have already responded to that. Just follow the indicators on the right side of the stream. The BCCM team is there, they’ll try and get and process as many of those questions as you can. This one particularly jumped out at me and it has occurred to me from time to time, not necessarily about co-operatives, but about joining anything to be honest. The $64 million question, do co-op members need to like one another? You can all have a crack at this. Why don’t you go John, you put your hand up.
John Seccombe:
Yeah I will. I don’t believe they need to be buddies, but I think certainly joining a cooperative, as Emma was talking about, comes with a mindset that you’re already going to be ready to accept working collaboratively, and so having that … I think that’s the essence of joining a co-operative. It’s not being friends, it’s about working together, and sure, it would be nice at the end of the day if we’re all friends, but we’re competitive as well, but working together we can achieve an end, so yeah, that’s how I see it.
Pete Lewis:
What do you think Emma?
Emma Robinson:
Look I think the founding group need to like each other. I think they need to be able to work together and you know, because you’re spending a lot of time together, you’re having some tough conversations, so there needs to be a level of respect and a level of, you know, capacity to work together and get on with the job. So I think at that founding, at the start, I think you need that founding group to be quite tight, but certainly I don’t think it’s about members having to like each other at all. I think it’s about the business model, and it’s about the process, and with good process I think you can bring people together and make sure you’re … you know, you’re making the right decisions, the best decisions.
Emma Robinson:
You don’t have to be best mates, so no, in the longer term, definitely not.
Pete Lewis:
Yeah. Kate I think it was Groucho Marx who said he’d never wanted to join a club that would have him for a member, have you struck people who went, “Look, I love the idea of what you’re doing, it’s just it doesn’t suit me?”
Kate Davies:
I can’t stand him. No I haven’t, but Emma’s dead right. So the original founders, they were friends, and certainly they could work together, but our co-op has grown geographically to the point where we have members in Queensland, we have members in the southern parts of New South Wales, the western parts of New South Wales, and further towards the Great Dividing Range, so a lot of our members have never met, but I wouldn’t mind betting that they’d get on, because they have a … they’re like-minded in their production and their goals for themselves. So yeah no, they’re not competing against each other and they don’t know each other, but yeah, I reckon they’d probably get on.
Pete Lewis:
Except for..
Kate Davies:
Certainly it’s not important.
Pete Lewis:
Except at State of Origin time I guess if you’ve got interstate people. Look, one of the more interesting … although we don’t mention Rugby League in Brisbane anymore, it’s an Australian football state, so, go the Brisbane Lions. Now the other interesting question that’s leapt out at me that’s been submitted by one of our viewers, and it relates to the wider benefits of cooperatives, that is looking quite beyond individual businesses and your individual commodities sector, and it relates to the benefits that flow to your local community. How important is it that you have a lot of skin in your local town, your local city?
Kate Davies:
Yeah.
Pete Lewis:
Go right ahead.
Kate Davies:
I reckon-
Pete Lewis:
Emma.
Kate Davies:
I think it’s important-
Pete Lewis:
No go right ahead, talk over the top of each other it’s fine, it’s a … it shows that it’s live.
Kate Davies:
You can go.
Pete Lewis:
Why don’t you go Kate, you were waving your hand.
Kate Davies:
No I was giving it over to Emma. Our co-operative bears the name of the town, so it’s vital that we put some skin in the game, definitely yeah, and it’s about family farms and family farms are about their small local towns, so yeah, it is. I think it’s really important to see and be seen, yeah.
Pete Lewis:
Emma I appreciate your patience, now what did you want to say?
Emma Robinson:
No problem. Look I think as Kate said, it is very much about supporting the community. I mean we’ve had tough conversations in our group about could what we’re trying to do, you know, impact on small businesses in our town? And how do we feel about that? So a value of ours is very much about how can we support our local businesses and how can there be a win-win. At the same time I think what we’re trying to do has got to be bigger than our local community, like we are talking about scale. I think scale is important. So we’re talking about, you know, geographically having a spread.
Emma Robinson:
The other comment I would make is that you know, there are tough times ahead for all of us, so what I would say is that if it’s not done by a cooperative, if there’s opportunities out there and it’s not done by a cooperative, it’ll be done by another player, and they’ll take that value, and they don’t care about communities, so you know if we don’t do one, Amazon will do it, and you know, they’ll come and take what they want. So communities are very important, but there’s going to be some loss, because that’s the nature of the model and the industries that we’re working in, and I think that the reality. So ultimately we are about how can we add value, how can there be a win-win, but we’re trying to change the model, so there’s always going to be a part of it … someone in that model that’s going to lose out from what they’re currently doing, and that’s the tough conversation that we have to have, and if we don’t have it, someone else will.
Emma Robinson:
And I’d rather a co-operative be involved than a … you know, a much larger corporate global giant that doesn’t have that same value.
Pete Lewis:
John in your case you’re a significant employer in where you operate aren’t you?
John Seccombe:
Correct, and you know, when you look and the flow and effects of that … of the wage…] Into the local community, it’s a huge, far-reaching influence on the community, and so just out of interest, downtown today and the first business said to me, you know, “How are you going up there?” Sort of thing, they went, “Well how are you guys going?” They’re very concerned and very interested in how the co-operative runs. The other thing is we’re based in one of the … well, the beef capital of Australia, it’s a very important industry in our region, and so the local community actually celebrates that, and we’re part of that celebration in our Beef Week.
John Seccombe:
Also the community has a sense of ownership, they know people who work here, and the other thing we do is try and give back to the community as much as we can. We support a lot of the local events, a lot of sporting events, you know, and the like, just to show that we’re good corporate citizens, and the most important thing about a co-operative though, is that any retained earnings or what we call profits, stay within the community, whether that’s through capital investments to make sure we’re here to employ the next generation, whether that’s through rebates back to our members who are able to spend in the town. Yeah, so the profits stay in the community, they don’t see them head off to a global destination. So I think that’s extremely important to the community.
Pete Lewis:
A just had a message through from Rockhampton, John, I just want to remind you that you are a beef capital, not the beef capital.
John Seccombe:
I’ll accept that.
Pete Lewis:
Yeah. Good for you. Listen, just a reminded, we are also running a poll question in conjunction with today’s co-operative conversation, and tonight’s poll question is, what is the biggest motivator for starting a farming co-op? We’ve heard a number of thoughts about that already, but satisfy yourself, go click on the poll in the live chat to the right of this stream to select your answer. We want to move … time is moving for us pretty rapidly, I guess Melina the experiences of all these people we’ve got around the table tonight and in the earlier episodes, would tend to suggest that cooperatives are not necessarily an easy way of operating, but in the long-term they do provide a number of very satisfactory and sustainable outcomes for both individual businesses, industries, and communities?
Melina Morrison:
Look I’m going to put it out there, a bit controversial based on your last question about community impacts. I would say that all co-operatives are social enterprises by dint of their structure. You know, it’s not an add-on, they are actually structured to make money, to do something, not the other way around, and that something, as the others have described, includes the 100% reinvestment back into their local economies and all of the other attendant benefits of that. So they do have one benefit, amongst all of the challenges of farming, and look, I’ll be frank with you, my farming is limited to the bedraggled lettuce heads in a container pot outside, but I think it’s a pretty tough business to be in, farming.
Melina Morrison:
So you can’t just say one model over another is going to make you more successful, but you don’t have a bunch of external shareholders that have a different interest in the business that need to extract about 15% before everything else gets paid. So in the long-run, sustainability and if you’re in the game for supply chain value adding and you want to reduce the costs of farming and maximize farm gate returns, then co-ops are a pretty good model.
Pete Lewis:
And I guess in uncertain times, and we’re right in the middle of a textbook case of uncertainty, there is that security I guess of safety in numbers and strength in numbers, which I guess Kate, must come as some consolation to people?
Kate Davies:
Safety in numbers, yes. Yeah I suppose so, that makes it sound … I don’t mean to make that sound vague, just that I hadn’t really sort of thought about it as safety in numbers, but yes, yeah, it’s affirming to see other people, you know, benefiting, other people in the same position as you benefiting from an organization like a co-op, yes it is, yeah, and I think it sort of … it sort of harks back to what we were talking about earlier where you know, like-minded people will always gravitate towards that good idea. Yeah.
Pete Lewis:
What about you Emma? What do you see as being the real positives that a co-operative approach could give your members at times like this, in times of uncertainly and certainly you’ve had some huge challenges in terms of weather events and things, and commodities, so lock out markets.
Emma Robinson:
Yeah. In the thick of the drought, you know, I could see that being part of a co-operative would certainly have protected us from what we were experiencing as an individual producer, so even the ability to optimise production by spreading animals around through a network … through a co-operative network could have been a possibility in a co-operative. You know the same deal with the recent floods in the north-west, the ability to access cattle, move cattle more efficiently because you’re part of a bigger network, and the ability to sell cattle, you know if we’ve been part of a co-operative with some capacity to be part of a supply chain, the ability to move cattle quickly, I think, would have been achievable, whereas it wasn’t on our own.
Emma Robinson:
So certainly I think the co-operative can help us reduce our risks, manage our risks, I think that’s a key opportunity, and I’ve also heard of many examples of where, you know, bio security risks, so when there was some kind of outbreak, being … a co-operative could sort of move quite quickly in responding to that, versus you know, multiple individuals all trying to respond in different ways. So I think there’s lots of, you know, yeah, benefits there in terms of managing those risks that we experience in agriculture.
Pete Lewis:
And I guess John, when you start to look at moving your commodity offshore into export markets, that brings in an entirely new set of challenges, and as we know only too well in recent times, some markets take the view that they will use whatever means possible to send a message, often via trade restrictions and bans which appear maybe on the surface a bit arbitrary and a bit tit-for-tat, so that just adds another complexity, and I guess if you’re in a co-operative situation you’re probably better placed to maybe look at some alternatives of where to send your product?
John Seccombe:
Yes and no. I mean you’re right about the vagaries of exporting globally, and it’s one of the biggest risks that the red meat industry faces, because it’s a fresh commodity, the barriers to trade are enormous, and yeah, as you said, when we get there we can find that a misinterpretation could get you out of a market, but I guess that’s the risk we handle, for us in a particular market we opened an office to help us overcome those risks, but to no avail, but the operators themselves are … in our business as well, we look at diversification, so we try not to center in on one particular market.
John Seccombe:
Unfortunately some of the riskier markets do pay a little bit extra, so it’s very tempting to divert product into those markets, but I think you’ve got to hold the course and supply your diverse markets as best you can, but yeah, very risky.
Pete Lewis:
And look, having said that Melina, we’ve made the observation before in this series that when you look at all the industry sectors across Australia, our agriculture, food, and those supply lines, supply chains, have probably performed as well, if not better than just about any other sector of the economy over the past six to nine months, and they couldn’t have done that without significant support from governments of all levels, state and federal.
Melina Morrison:
Yes, well I suppose governments are being called upon … the government at the state and federal levels being called upon to try and help with supply chain disruptions, I mean there’s a critical issue in the agricultural industry to do with workforce, so it’s really about being able to respond co-operatively and collectively to those challenges, but also to have business model diversity, we would say, is very important as well. So you know we have been able to feed ourselves as a nation through this and ongoing, and a lot of that’s got to do with the fact that we still have a really rich and important family farming, locally-owned, domestically-owned agricultural sector and food security’s certainly been an issue, and the sovereignty of supply chains.
Melina Morrison:
So now more than ever it’s really important for governments, in addition to stimulus payments, to think about the other things that bring about economic and industry sustainability so that we’re not just dependent on grants and handouts in times of crisis, that we can actually, you know, self-help, do some of this as communities as well.
Pete Lewis:
An excellent note I think on which to finish. I really want to thank you all very much for being part of a very interesting, informative, and some would say also entertaining discussion tonight. We are pretty much out of time, I do really want to thank you for being with us, particularly Emma, you’ve gone into extra time there in the kids classroom up there on your property, and it’s fantastic to see that you have such a strong wifi signal coming out of a kids classroom. Thank you Kate for joining us from Coonabarabran, and John from Casino, we appreciate your insights and your expertise, and once again of course, a big thanks to Melina Morrison for helping us wrangle this conversation and keep it going in the right direction.
Pete Lewis:
So thank you one and thank you all. This livestream Co-operative Conversations of course, is part of the Co-operative Farming, which is a new online education resource for farmers. Also through Co-operative Farming, farmers, fishers, and foresters, as well as members of cooperatives can access educational bursaries to cover up to 90% of the course cost for relevant co-operative education. You can jump online at coopfarming.coop to find out more about that, or you can email Co-op Farming at coopfarming@BCCM.coop. Once again, thanks very much for being part of tonight’s round table, and if you joined us earlier for the interview with Emma, we appreciate your staying power as well. You are now just about as well-informed about the Beef Collaboration Project as anybody in Queensland.
Pete Lewis:
So well done to you all. For details of the episodes that are coming up later this month, head to conversations.coopfarming.coop, and remember all of our online episodes that have been live streamed are also available on demand. There’s some great stuff back there, and we look forward to seeing you next time we take the conversation further on co-operative farming. It’s been great being with you, see you next time.
