Co-operative to expand grower partnerships

BRITAIN’S biggest farmer, the Co-operative Farms, is seeking new partnerships with other growers to supply vegetables for the increased number of retail stores the Co-operative Group now has, following its acquisition of Somerfield last year.

The aim is to expand availability of the supermarket’s unique selling proposition ‘Grown by Us’, with the farms division introducing a level of flexibility to its growing model to enable it to work with other farmers.

“We are working towards an ambitious target of supplying 25 per cent of British-grown fresh produce sold in Co-operative food stores,” said Co-operative Farms managing director, Christine Tacon.

“Whatever the partnerships agreement, we take from 50 per cent to 100 per cent ownership of the crop,” she says. “In one example, a potato grower is providing the land, labour and machinery, under our management, and we are providing the seed, chemical inputs and control the agronomy.

“Division of the financial output from the crop is dependent on the original agreement.”

Ms Tacon says there is considerable flexibility in the detail of ‘contracts’, which could be tailored to suit each party and any profits or losses are shared, depending on the percentage ownership of the crop.

The focus is currently on potatoes, onions and broccoli, but other produce is under consideration for partnership arrangements.

Minimum price
Commonly, with potatoes for example, a minimum and maximum price is agreed at the outset. “As you can imagine we are currently paying growers a lot more for potatoes than they would be making on the open market, but this is the way it works,” she says.

The Co-operative Farms has just reported profits of £4.2million for the year to January 2010 - down on last year’s £5.7million, due to lower cereal prices.

However, this was countered, to some extent, by strong performances by the two potato packhouses in Scotland and Staffordshire.

19 March 2010