Home Farming Farming Blogs Country Blog: Andrew Forgrave

When farming is its own worst enemy

Posted by Andrew Forgrave on February 6, 2008 5:51 PM | 

ONE OF life’s certainties is the ability of the UK farming sector to shoot itself in the foot.

This week the much-anticipated super merger between dairy co-ops First Milk and Milk Link collapsed into a pile of cow pooh, prompting headline writers around the country to work on puns that included the words “milk” and “sour”.

First%20Milk_logo.jpg

The merger, had it gone ahead, would have created a new £1bn giant that, for the first time, might have been capable of living with the big boys of the dairy world.

After a decade of talking up co-operatives and strength in numbers, it seemed that UK farming was about to get something right.

Milk%20Link%20logo.gif

What makes the failure even more galling is that the competition authorities had given the deal the green light.

Yes, the same people who, for the past 15 years, had bust a gut to emasculate the industry by fragmenting dairy groups.

It doesn’t bode well for the lamb sector either: here’s an industry with, essentially, only two producers - Britain and New Zealand.

Imagine what they could achieve if every farmer got together.

But it’s often said that a farmer’s biggest business foe is his own neighbour: when you’re constantly peering over the hedge, it’s difficult to countenance co-operation.


 

Comments (1)

Colette Burke wrote...

Truly tragic news.I don't think you can blame farmers.Its the boards of First Milk and Milk Link who need to be called to account. Gwyn Jones from the NFU asked for straight answers to be given to farmers about why the talks failed.The place NOT to start questions is about the nitty gritty of business valuation, or structure, or who is to blame for what.Farmers should instead be probing the competence of their boards to build a better future, and withdraw support if they don't like the answers.A good question to start the ball rolling is how much money would be saved by streamlining the two coops into one business, how much sales would grow by reinvesting the cost savings, and how much extra profit would come back to farmers.The result might make a squabble over valuation seem like something worth sorting out.
Colette

Posted by: Colette Burke  | February 7, 2008 4:59 PM

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