1st meeting of the Thematic Group on Unlocking the Potential of Cooperation

The first meeting of this Thematic Group started with an icebreaker, where members indicated keys to unlocking the potential of cooperation in the CAP (see word cloud).

Four opening presentations provided TG members with insights into the topic.

Margherita Muzzillo (European Commission - DG AGRI) highlighted the diversity of actors operating in rural areas and the various challenges faced, including: fragmented land, small and diverse farms, diverse quality standards, certification requirements, market imbalances, unfair trading practices, reaching a critical mass, outmigration, low service provision, and lack of skills and innovation. Margherita outlined the potential socio-economic and environmental benefits of cooperating and highlighted the importance of knowledge sharing, as well as increasing farmers’ bargaining power and lowering their administrative costs. She reminded attendees that cooperation is a cross-cutting principle of the CAP with many entry points, e.g., AKIS and sectoral support. Cooperation is envisaged to continue in the future CAP, including with respect to shared risk management, the position of farmers in the market, innovation and digitisation.

Mattias Gotting (Swedish Board of Agriculture) explained that large cooperatives play an important role in Swedish agriculture, handling and processing most agricultural production. They are crucial to enhancing the position of farmers in the market, providing support through, e.g., training and new platforms to enable farmers to access information on prices necessary for decision making.

Examples of cooperation in Swedish agriculture include online platforms financed by farmers in which they organise research and test new crops, as well as farm machinery rings to overcome high transportation costs and distances from hire services. CAP funding is used to increase knowledge exchange and support rural development mainly through article 77 and EIP-AGRI. Knowledge hubs have also been launched to link researchers with farmers.

Significant challenges to cooperation remain, particularly in northern Sweden, due to large travel distances and land abandonment, preventing a single unified approach across the country. There is also a debate about how best to support collaboration between established farmers and new/young farmers.

Charlotte Gohier (FACE Network - Artisan & Farmhouse cheesemakers, France) outlined the work of the FACE Network, which operates across Europe and unites 21 producer associations alongside other members, including universities and companies. The FACE Network represents over 4 000 producers and works to ensure that the sector has the capacity to engage effectively with European institutions, with an emphasis on influencing the regulatory framework to ensure it meets the needs of small dairies. The network itself is made up of clusters that focus on specific aspects such as hygiene, production technology, marketing and promotion. Challenges for the FACE network include: accessing EU funding for pilot projects run by the core team; adapting EU legislation for small-scale production; members’ availability to participate across the range of activities operated by the network; and the diversity of sectors within the network, which prevents FACE from being recognised as an interbranch organisation.

Liene Feldmane (Latvian Rural Advisory & Education Centre - LLKC) highlighted the role of advisory services in enabling farmer cooperation and leadership. In Latvia, there are 50 recognised agricultural cooperatives, bringing together around 5 500 farms. Most cooperatives focus on the production of milk and grain, while others are focused on fruit, vegetables, meat, honey and forestry.

Recognised cooperatives are evaluated every year according to cooperative principles. Recognition gives access to special CAP measures and funding (investments) and some national benefits, such as reduced transport taxes. There is also support for newly recognised producer groups, based on their turnover. However, Liene outlined some practical challenges: first, a cooperative must be operational for a minimum of one year before it can be recognised; second, the support is paid for five years, but if recognition criteria are not met in any given year, all previous support must be paid back.

LLKC plays a crucial neutral and trusted role, offering practical support with business planning, market research, and accessing CAP instruments. The Advisory Service organises training and study visits for cooperatives. LLKC also lowers the ‘entry cost’ of cooperation, helping to lay its foundations: a shared goal, a clear structure, financial commitment, and, above all, trust. Ongoing support for cooperation also involves targeted mentoring support to strengthen leadership, ensure sustainability, and encourage responsible participation of members in cooperatives.

TG Members engaged in two rounds of group discussions exploring specific aspects of cooperation, sharing insights from their own experiences.

The first round explored success factors for increasing business competitiveness, resilience and growth through cooperation.

Members shared a variety of examples, including machinery rings, collective insurance systems to mitigate risk, and collective banks for farmers. Such examples include an Irish cooperative that applies for funding on behalf of their members, thus helping them to access financing, e.g., for damage recoveries after a heavy storm; and a large dairy cooperative in Lithuania, producing powdered milk, that has developed an effective business model and has already gathered 300 members, with many new potential ones.

Additional examples highlighted the market opportunities for collective actions centred on green credentials, e.g., an inter-branch form of cooperation in Belgium between regenerative barley producers and brewers. Others focused on the key role in supporting environmental outcomes, citing nature conservation cooperatives as examples, including various Spanish stakeholders collaborating to create productive firebreaks using traditional cultivation, or small-scale Polish farms cooperating on projects on agri-environment measures. Discussions highlighted the key role of advisory centres in providing farmers with guidance and help to manage the processes.

Success through cooperation relies on many factors: ownership, transparency, member dynamics, strong management and strong leadership. Fundamentally, farmers must be at the heart of things, irrespective of the form of cooperation; however, they need support with capacity building, organisational development, business innovation and growth. Training and advice are therefore essential. Collaboration with universities was also identified as important in informing business opportunities.

Particularly for small cooperatives, the crucial role of leadership and the availability of a staff member (employed or contracted) to look after funding and collaboration opportunities is key, as an individual farmer cannot deal with these aspects while running the daily tasks at the farm. For TG members, cooperation through local clusters across the value chain (including with consumers) can be an effective way of diversifying business and boosting growth.

A crucial success factor in cooperation is the nature of the membership (farmers owning their own associations) and trust – knowing farm businesses can come together to actively listen and learn from each other on shared important issues, actions and individual businesses. Very often cooperation relies on a combination of working bottom-up and with farmers associations. Trust also drives innovation.

TG members also highlighted that many farmers still lack trust and have a negative mindset - or lack of knowledge - about the benefits of cooperation, thus stifling progress. They also particularly mistrust younger people who would like to innovate. Open-mindedness is key. Farmers should not just focus on problems or be limited by cultural/social norms, but should consider the opportunities and mutual support from their peers and the knowledge therein. A loss of farmers’ trust can come from overly-corporate ownership of larger cooperatives, which creates a feeling of distance from the producers, even if such cooperatives are (unlike smaller cooperatives) better able to deal with bigger issues such as regulation and negotiate or offer better prices for their members.

Members underlined that “Whatever you do, cooperation is not a result, but a journey”.

Discussions then moved on to the effectiveness of the CAP in unlocking the potential of cooperation.

Effective actions under the CAP cited by TG members included:

Based on the group discussions, some key areas of action that may unlock the potential for cooperation were identified: