update
Autumn 2020 - news from, and for, Scotland’s farmer co-ops
Climate Change and Agriculture SAOS’s Emma Patterson Taylor thinks it’s time to leave the ostriches to their sand It’s September 2020, and in this Covid-19 world I predictably find myself on yet another webinar, with a renowned academic telling us all that it’s impossible to define sustainability because it means so many different things to different people. I am tempted to raise my hand, virtually, but think better of it; there’s no way he can’t be aware of the following: “Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” WCED Brundtland Report 1987 I would argue that defining and understanding the concept of sustainability isn’t hard, it has been accepting the reality of what that means which has proved to be so challenging for all of us. As a cultural phenomenon which emerged at the dawn of our civilisation, it has been difficult for farming to understand its role in relation to Climate Change. How can a traditional industry that has been practised for over 12,000 years, and is critical for human survival be touted as auguring an ‘age of doom’? The First Agricultural Revolution was a seismic shift that brought about huge positive change for humanity, and was the beginning of society as we know it. Around 10,000 BC, our ancestors decided to settle down and began domesticating not only themselves, but the land and animals around them. In a bid to secure their future, humans identified ways of procuring a food supply from the Fertile Crescent that stretched across land that is now known as the Middle East. The cultivation of plants began with crops including wheat, barley, peas and flax. Livestock breeding was also introduced with the domestication of wild boars, the Persian ibex, along with the sheep and cows we commonly find on farms today. Farming formed one of humanity’s earliest building blocks and played a pivotal role in our evolution. Without the emergence of settlements and the increase in food security that agriculture provided, our forebears would have had little time to share ideas or think about much beyond their basic survival. As food supply potential was unlocked and settlements provided stability, populations soared and civilisations grew and evolved. From the late 1700s to the early 1800s, another horizon-expanding, epoch-defining moment in history took place. The Industrial Revolution transformed economies, previously based on agriculture, into systems where large-scale manufacturing and heavy industry predominated. Populations boomed again and innovations in extraction and exploitation of fossil fuels powered society towards many of the achievements and challenges we are experiencing today. Over time, people moved further away from the land as agriculture mechanised and fewer workers were needed to manage each farm. Society saw industry as the new future, and young people, seeking to make their fortune and build a better life for themselves, went to cities to fulfil those dreams. The fossil fuel powered innovations that emerged during the last 200 years have fundamentally changed our lives. Huge wealth was unlocked for many, and power companies enjoyed vast profits which, in turn, have underpinned the personal pensions of today. A dependency on power became built into the fabric of society, which most of us would find it unimaginable to live without. Meanwhile, over the last 20 years, a growing realisation of the true cost of that power has begun to emerge. Slowly but surely, the evidence has persisted, until even the oil and gas companies were forced to accept that their industry had bequeathed an ominous legacy, in the form of CO2, that nobody wants to claim. Dealing with the threat of Climate Change, and restructuring our businesses and livelihoods so they can be sustainable, is a challenge no sector is finding easy. Climate Change is like the unwanted dinner guest everyone thinks someone else should pay for, despite all of us having eaten at the restaurant for years without asking for a bill, let alone paying up.
Let’s consider how farming could decide to deal with that bill We could say that we didn’t know. That no one told us there were Climate Change impacts relating to agriculture. We weren’t aware there was a problem and don’t really understand why someone is saying there is. Agriculture feeds the world so what are we meant to do? People need to be fed somehow. Cont overleaf
Agriculture and Climate Change (continued)
saos news and views
We could blame others. Our revolution was a great contribution to civilisation, it isn’t our fault if another one took place centuries later and had all these unintended consequences. It’s unfair that we are being penalised. Why should we pay the price? We could make excuses. It’s impossible to rear livestock without them belching out methane so there’s no point trying. They’ve done it for millennia and won’t stop now no matter how many seaweed supplements they’re fed. We could wait and hope. We could say it’s worrying that this is happening, but we have seen so much change come and go over the years. It is a concern, but we’re sure a boffin in some university and/or a clever bit of technology will come along and take care of things.
Or we could choose to be accountable We could acknowledge reality. We could accept that Climate Change is everyone’s concern and everyone’s responsibility. Never mind who caused it, we have a huge challenge facing all of us. Every sector will have to work to reduce their emissions, we all need to do everything we can. We could own it. We could say agriculture has had a part to play in causing Climate Change and we are committed to mitigating that impact and being part of the solution. We are proud of our industry and are willing to take ownership of that task. We could find solutions. Clearly there are inherent emissions associated with food production, but let’s find out what is possible and pursue that. There are so many resources out there, as well as other likeminded organisations and farmers – we’ll work together and identify what can be done. Make it happen. We could own and take responsibility for tackling the issue of Climate Change in agriculture. We could demonstrate our commitment to mitigating our impact, even if no one helps us. We could say that as a sector we are going to prioritise Climate Change action and do whatever it takes to play our part. Let’s choose to be empowered and leave the victim card for others to play. Denying there is work to be done will not help us negotiate. Let’s choose to keep our heads out of the sand and show the world that we know how to sit around the table and do our bit. With the target of Net Zero set, it has become increasingly convenient for sectors struggling to clean up their own act, to have attention and focus sit elsewhere. Agriculture has become easy prey during a crisis that is not of its making. For an industry renowned for a 24/7, 365 days a year work schedule, rather than ‘mega bucks’ bonuses, it has been devastating to discover that agriculture has ended up in the hot seat. Somewhere, somehow, a Machiavellian move has been played. There is a profound irony to the narrative “change your diet to save the planet” when meaningful solutions that need to be considered lie elsewhere. When the spotlight is shining on institutions that can make the difference, not individuals deciding what to have for lunch, we will know real commitment to Net Zero has arrived. Setting these distractions aside, let’s remember that in farming we inherently understand preserving what we have and handing it down, uncompromised, to the next generation. Now is the time to use that knowledge, work together and play our part in securing a sustainable future. Here’s hoping a few others may join us. “The one institution in the world that has the capital, the cashflow, and the engineering capability of solving the climate change problem, is the global fossil fuel industry.” Myles Allen, The physicist behind Net Zero Emma is SAOS’s lead on climate change and sustainability, and is developing our CarbonPositive programme. Find out more at: www.saos.coop/what-we-do/carbonpositive
Jane Mitchell Appointed to SAOS Board We are delighted to announce that Jane Mitchell has joined our Board of directors. Jane has been a member of SAOS’s Council since May 2018 through her role as a Non-Executive Director of the ANM Group, and brings additional financial expertise to the Board of SAOS. Coming from a farming background, Jane became a Chartered Accountant after completing her BSc in Agriculture at Aberdeen University. She is currently employed as Business Advisory Senior Manager at Johnston Carmichael. Jane was co-opted on to the Board in June and has already attended her first ‘virtual’ Board meeting. Jane told us: “I was really pleased to be asked to join the SAOS Board. I am full of respect for the organisation and its team, and I see their work as hugely beneficial, not only to its member co-ops but to the wider food and farming industry. I look forward to being part of that and helping however I can.” SAOS Chairman, Mark Clark, commented: “The board was unanimous in endorsing Jane’s appointment. Not only does she bring valuable financial expertise, but her agricultural business experience and involvement through her other roles, including as an Associate of CARAS, mean she’s an ideal fit to help develop and expand the thinking of the SAOS Board.”
Sun Shines for George’s Topless Trip It was lovely to receive this picture from our Bob Yuill, showing George Bruce of Ringlink setting off on his Triumph TR7 trip a few weeks ago. George bid generously for the pleasure of borrowing Bob’s TR7 back in January at our conference dinner auction, run by Stand Up Farmer Jim Smith, to raise funds for RSABI. So glad that the sun shone and you got the top down George! Thanks again to George and all who bid. The auction raised a total of £3000 for RSABI’s coffers.
saos news and views
SAOS Training Programme for 2020/21
Developing staff capability through shared learning continues to be one of the most effective ways of improving co-op performance. Whatever your experience, access to training is hugely advantageous and informs the decisions you make for your co-op. This has been brought into sharp focus as we transition into the ‘new normal’, post-Covid workplace. Through our conversations with members, it has become increasingly apparent that investment in training has reaped benefits for our co-ops and their staff, not least in how positively they have adapted to the changing work environment. The pressure of remote working and the requirement for flexibility across the business in covering for prolonged absences, have highlighted the real difference a highly trained workforce can make. The last six months have seen SAOS adapt to new ways of working too. It has been an opportunity to take stock, explore new platforms and partnerships and move forward with a bespoke training and development programme that continues to offer a wide range of training which should appeal to both our co-op members and non-members. We have taken the plunge with online learning and are enjoying the opportunities that it now offers, not least the increase in accessibility. Our first online session was in July with our partners at NS Design. Cyber Security – The Essentials, was our second workshop to be led by the highly knowledgeable and engaging Gary Ennis. As one participant noted: “The pace of content was good and there was a nice mix of technical info and practical/real-world application.” In August, we launched the first in our series of three ‘Refresh Your Company Secretary Skills’ workshops, aimed not only at Company Secretaries, but anyone with an interest in co-op governance. This workshop attracted interest from a number of co-op staff based in some of the more remote areas of Scotland and highlighted the increased accessibility that online learning offers. We continue to plan for the future and have a few ideas in the pipeline that will be delivered both online and face to face when it is safe to do so, and we are very much looking forward to that day, the biscuits, and the coffee! Here’s what’s coming up over the next few months:
Cyber Security – The Essentials (Led by Gary Ennis, NS Design Ltd) 22nd October 2020, 10 .00-12:30. Delivered via “Go To Meeting” With more business processes moving into the cloud, we need to be more cautious than ever, defending against hacks, exploits and scams. This practical half-day workshop will look at website security, social media safety, password protection and more. Aimed at anyone who wants to embrace online opportunities, but who understands the real dangers and their impact in today’s connected world. Cost: £20 plus VAT
Social Media - Making an Impact
(Led by Gary Ennis, NS Design Ltd)
4th and 5th November 2020, 10.00-13:00. Delivered via “Go To Meeting” This two-part workshop will cover key areas that will appeal to those businesses actively using social media and to those only just beginning to consider its potential. Beginning with a social media round-up, we will talk participants through the current social landscape and its tools and platforms. The session will move on to look specifically at Facebook and examine five strategies including a detailed look at ‘paid’ options. We’ll brainstorm great ideas for content, share what works and what doesn’t, and pull together the basics of a content strategy to achieve impact via your messages. The workshop will finish with a look at the dangers - the ‘anti-social media’. Cost: £75 plus VAT total cost for both sessions. For further or to book either course, please contact allison.watson@saos.coop 07548 215669 or go to www.saos.coop/events-and-training
Jim Booth Looks at the Benefits of Preparing a Risk Register and the Steps Involved Businesses able to cope with the increased risk and uncertainty in this ever changing world, are the ones most likely to succeed. We’ve learned from the current pandemic how unexpected events can happen at any time. Who’d have predicted such levels of disruption this time last year? Going through the process of preparing a risk register makes any business more agile and responsive to market fluctuations - and more able to satisfy members’ and customers’ ever-changing needs. There’s advantage in adapting to new circumstances more quickly than competitors, which could lead to further competitive advantage in the medium and long term. Benefits of creating a Risk Register include: • Fewer sudden shocks and unwelcome surprises • Greater likelihood of achieving success • Improved performance over the long term • Early movement into new business opportunities • Reduction in management time spent ‘fire fighting’ • Being more agile/able to adapt to any future crisis • More focussed internally on doing the right things properly Apart from these benefits, a risk register also provides confidence to members, customers, and others such as insurers and lenders, that the co-op is professionally governed. Identifying potential risks is not easy. Understanding the business fully - the processes involved, critical points and key success factors is a good start. Adopting a supply chain approach can be useful, mapping out the flow of services and information and all the external relationships. Planning for unexpected events takes time and effort, but it is rewarding, even if that’s only to get a better understanding of the business and its processes.
A list of potential risks in itself is of limited value, the aim should be to evaluate and prioritise the main risks facing the co-op business. The most useful method to prioritise and identify key risks is by evaluating using two criteria: • Likelihood of occurring/the probability • Impact on the business Mitigating risk is probably the most important element in the process, and thinking about how best to mitigate the risks identified. Broadly there are five mitigation strategies: • Ignore – surprisingly common • Avoid – eliminate, withdraw • Share – outsource, insurance • Mitigate – manage through a variety of options • Retain – accept the risk Elimination of a risk, or even reduction to an acceptable level, may not always be possible, so the board needs to decide how to proceed sensibly and also determine the amount of risk they are willing to take. A high level of involvement in improving risk management and internal control is crucial. It is important to be alert to new risks the business could face and have an early warning system in place for changing risk levels. Helping co-ops prepare a risk register is one of SAOS’s key member services. An annual risk register is not a box ticking exercise, it is a powerful tool to help ensure future success and an opportunity to improve, not only the management of risk, but the business as a whole. For more info, please contact: jim.booth@saos.coop
Scotlean Celebrates 40 Years With £250k Dividend for Members
co-ops news
Scotlean Pigs, which this year celebrates 40 years in business, has rewarded its 90 farmer members with a share of the £250,000 dividend pay-out. Scotlean Chairman, Richard Butterworth (pictured right) explained: “This year’s payment brings the total paid to our members to more than £500,000 in the last three years. The dividend has been particularly welcomed this year as the coronavirus crisis has come along during an already difficult and prolonged period of economic insecurity, higher market volatility and uncertain outlook.” “Changes to the size of the UK pig industry have led to increased imports of pig meat, often from countries with lower production costs, and this is only likely to increase following Brexit, so it is crucial for our members that Scotlean is fullyfocused on maximising opportunities for them and their businesses. Farmers are facing more challenges than ever – Covid-19, and then Brexit, along with a new Agriculture Bill on the horizon. The best way to navigate our way through these uncharted waters is through co-operation.” The Carlisle-based co-op, which employs five staff, was established in Scotland in 1980 by a group of progressive pig producers who could see the benefits of working together to establish their own marketing opportunities post farm gate. Scotlean soon expanded into England and today has members from Aberdeenshire and throughout England. Scotlean markets members’ pigs into the best outlets by matching pig types with contracts to maximise profit for members and satisfaction for processors. Members also benefit from the co-op’s competitive purchasing initiatives, which reduce producers’ costs, whilst maintaining quality and pig performance. Chief Executive, Ian Paragreen, added: “Our members benefit annually from the dividends that we pass back as a co-op. It is very important for members to feel rewarded and benefit from being part of a successful organisation that works extremely hard on their behalf in the ever changing market place we operate in.”
ESG has Joined AHDB’s Farm Excellence Programme East of Scotland Growers (ESG) has joined AHDB’s Farm Excellence programme as the new Strategic Centre for field vegetable crops - brassicas. A series of four trials at ESG’s fields in Balmullo, Fife, are being conducted over the brassica-growing season.The grower-led trials will look at methods of preventing downy mildew in cauliflower and the impact of bio-stimulants on crop health and vigour. They will also look at herbicide screening pre and post planting, as well as the use of herbicides that have shown promise in AHDB’s SCEPTREplus trials. AHDB is working in partnership with ESG, who produce broccoli and cauliflower and Kettle Produce, who grow brussels sprouts and swedes, to carry out the trials. ADAS is the subcontractor in charge of the trials, which are being conducted by Oxford Agriculture Trials (OATS). NIAB, the National Institute of Agricultural Botany, is also a partner in the project. James Rome, Agronomist at ESG, (pictured above) said: “We were keen to work with AHDB as we face different challenges in Scotland from other parts of the UK. We wanted to trial new approaches on our doorstep that can benefit local growers. The biggest trial we will be undertaking is for bio-stimulants. We need to adapt our conventional methods of growing to use these new products so we are less reliant on traditional chemistry. If we can produce a healthy plant from the start then we will have less problems with disease and pests.” The new Scottish Strategic Centre for Brassicas complements the current AHDB strategic centres for field vegetable crops, which conduct ‘core’ variety evaluation trials each year. Additional funding is available specifically for grower-led areas of work and the new centre is the result of such a grower-led initiative where specific problems that occur in Scotland can be addressed. Scotland is one of the three key brassica production regions for the UK, in addition to Lincolnshire and Cornwall, and Scottish growers are important suppliers of broccoli, cauliflower, brussels sprouts and swedes. Over 90 per cent of all autumn/winter cauliflower and spring cabbage produced in the UK is now sold through the supermarkets as a programmed part of their 52-week supply. Continuity of supply is paramount when producing vegetables for supermarkets to a defined specification of quality, quantity and timeliness. Dr Dawn Teverson, AHDB Knowledge Exchange Manager for Horticulture, said: “Scotland’s distinct regional climate lends it to a summer production peak for flower-headed brassicas and overwintered brussels sprouts but also favours diseases such as downy mildew and light leaf spot, which are more minor issues in other regions. “We are delighted to announce this new partnership and look forward to working together to overcome some of the unique challenges faced by our growers in Scotland.”
New Store on Islay for Tarff Valley
co-ops news
No mean feat in the middle of lockdown, however Tarff Vally opened its tenth store, on the isle of Islay, in the middle of July. The new store is situated in Islay House Square which was originally established in the 1790’s and is a thriving hub of local businesses. The store offers the usual comprehensive range of products which caters for the rural community, smallholders and farmers. Store Manager, Mairi Hope, told us: “Things have been going really well. It was quite challenging to get up and running during lockdown but everyone has reacted really positively to our opening and lots have people have come in to say hello and we’ve been busy right from the start.” The store of course stocks Tarff’s Rosette product range of animal feed, fertiliser, animal health and equipment, agronomy, hardware, clothing and footwear. There will also be a selection of products for the horse and small animal owner, such as feeding, brushes and pet accessories. The store has initially stocked essential products which have been carefully picked to suit customers’ current needs, including animal feed for small and large animals, household goods, buckets and brushes, poultry products, waterproofs and wellies. As the store gets fully up and running, it will sell a much wider range of goods including quality clothing and footwear with brands including Hoggs of Fife, Le Chameau and Jack Pyke. The store has of course had social distancing guidelines in place from the start to make it safe for customers and staff, such as screens at the till area and reduced number of customers in the store at one time. There is also a ‘Call and Collect’ service.
Machinery Rings’ Training Courses get Back up and Running It has been heartening to hear about, and see evidence on social media, of some ‘actual’ training courses being run again following the hiatus enforced by Covid-19. The situation meant an instant stop to all ‘in person’ training which was a blow to Scotland’s various Machinery Rings who deliver a vast number of courses across the length and breadth of the country. Training courses delivered by SMRA members in 2019
A total of 12,747 training sessions were delivered, on a wide range of different subjects, by the machinery rings in 2019.
We heard from Gail Robertson and Peter Wood of Ringlink, the largest training provider of the rings. Gail is a also a member of the Skills for Farming group, co-ordinated by NFU Scotland, which aims to bring together training best practice and expertise for the industry. Gail told us: “Covid-19 has undoubtedly had a significant impact on training activity for Ringlink and the industry throughout, as lockdown in March halted all training activity with immediate effect. A limited range of e-learning courses was offered during lockdown, whilst preparations commenced with instructors to agree how short course training could be delivered safely following government approval. Working co-operatively with training providers, instructors and potential trainees, a Covid-19 policy was implemented to allow core training courses to resume. Key clients requiring legislative training, along with our pre-apprentices, received short course training including Forklift telescopic and tractor training throughout July and currently a full programme of training courses is available. (www. ringlinkservices.co.uk) This has not been without its challenges, the instructors have had to adapt to social distancing, the trainees receive pre-course Covid guidance and we’ve also had to deal with local lockdowns which affects the training delivery and in some cases will impact whether a course remains viable to run. Further challenges will likely arise as candidates will be affected by track and trace, potential local lockdowns may occur resulting in short notice cancellations and lost revenue for the business. During July, we delivered just 50% of training compared to the same time last year, however bookings for the next few months are encouraging. Ringlink Services remains optimistic for the future as training manager Peter Wood comments: “ With adversity lie opportunities and businesses will be forced to change and potentially upskill employees. Offering over a hundred different training courses to a variety of industry sectors such as construction, haulage, forestry, agriculture, estates and public authorities, allows Ringlink Services to support a wide range of businesses and indeed to those considering a career change and looking to enhance their skill set for the future.” Find out what training is available from your local machinery ring at www.scottishmachineryrings.co.uk
ANM Members Invest in Their Co-op in Times of Uncertainty
co-ops news
ANM Group has announced it has reached a record high in member share capital investment, with confirmation that the total level of member funds has exceeded £7m.
In its recent Annual Report, ANM reported an increase in share capital during 2019 of £309,000, to a total of £6.85m at 31st December. The news that increasing member investment has accelerated further during 2020 is regarded as highly significant during the Covid-19 outbreak. The milestone has been reached as the Group has widened the range of benefits available to deliver greater value for members. Full entitlement to those benefits is available to anyone who invests a minimum of only £500, and recent months have seen a significant increase in membership, attracted by a sector leading offer including: •
All customers benefitting from the most competitive commission rates in the marketplace, and commission rates for members starting from as low as 3%, for all livestock sales at Thainstone and Caithness.
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Attractive loan scheme rates for members
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Discount at the Group’s restaurants, including the award-winning Porterhouse Steakhouse, renowned for serving the finest of meat and locally-sourced fresh produce from the north east
Grant Rogerson, Chief Executive, commented: “The increase in shareholding illustrates the confidence our members have in us, and this, combined with the dedication and sheer hard work from teams across all our divisions, puts us in a strong position to continue facing the challenges of the current climate head on. “As a business we will continue to reward our members’ loyalty. With their continued support, we can ensure we bring them the strongest returns, as we focus on delivering service and value, with a growing range of benefits.” The Group is set to announce further exclusive benefits for members over the coming months.
Business Acquisition Grows Grampian’s Portfolio Grampian Growers recently added leading chip shop supply business, William Fraser Potato Merchants, to their business portfolio. The Aberdeen firm, which supplies potatoes to around 80 chip shops, from Elgin to Peterhead and south to Perth and Dunkeld, will now relocate to Grampian Growers’ base at Logie, Montrose. The acquisition of the business also sees Grampian Growers take on William Fraser’s four staff members and three lorries, and is a major step towards the domestic market for the co-op. Grampian Growers’ Managing Director (and SAOS Chairman) Mark Clark, commented: “Every week, more than 50 tonnes of English chipping potatoes will be hauled north for distribution from Cambridgeshire and Lincolnshire, where the most of the popular chipping varieties Agria, Markies, Maris Piper and Sagitta are grown. Grampian Growers already sells seed to some of the ware suppliers that they’ll be buying from, and has partnerships with companies in Holland which control some of the seed for varieties that the chip shops prefer to use. Mark added: “The hope is to be able to offer more growers access to these varieties in future.” Grampian Growers is one of the leading exporters of seed potatoes and daffodil flowers in Scotland and the largest exporter of daffodil bulbs in the UK, there are 12 shareholder members growing daffodil bulbs, daffodil flowers and potatoes, and an additional 20 members growing potatoes. The new deal will mean that their Montrose base will be fully utilised all year round, maximising the co-op’s capacity in future. Mark added: “Lockdown severely affected the potato supply trade, but it’s now back to 85% of its pre-Covid turnover. We’re delighted to have added this new string to our bow to help the business progress and all the profits from the William Fraser supply business will go back to members as they will be reinvested.”
Successful First Year for Scottish Potato Co-op Having formed as a co-op in 2019, the Scottish Potato Co-op (SPC) can reflect on a hugely successful first 12 months. Their 17 members, who are largely based in Angus and Fife, grow more than 3,100 acres (65,000 tonnes) of ware potatoes, supplying six different customers all year round, which makes production management key. SAOS’s Jim Booth, who acts as SPC’s company secretary and works closely with the board, is impressed: “From the onset, the Board was very clear about what they wanted to achieve, and that they needed to ensure the foundations were in place for a successful business: getting the right people together and putting good governance practices and appropriate policies in place right from the start. A key decision has been the investment in a bespoke software package that links production, stock control, marketing and finance, to provide real time information to improve decision making.
Grampian Growers’ Mark Clark, with Jon Halliwell, right, who has managed William Fraser for the last 19 years
“The co-op also took an early decision to create a ‘contingency fund’ rather than pay for expensive credit insurance, through a £2 per tonne levy – in effect, self-insuring through co-operation. It is great to see what a well-run co-op can achieve, showcasing the real benefits of co-operation.” SPC’s Chairman, Russell Brown of Inverdovat Farm, Tayport, added: “SPC’s success is down to two key factors. First, the quality and professionalism of our member producers - their ability to produce first class potatoes that constantly meet customers’ expectations is essential. And secondly, we needed an experienced marketing agent, who really understands the potato industry, has a focus on attention to detail, and is highly regarded and respected. We are fortunate in having Fraser Malcolm, who deserves great credit for what SPC has achieved in our first year.”
co-ops news
First Milk Delivers Solid Performance A year of progress, delivering growth, investment and improved returns for First Milk members are reflected in the co-op’s Annual Report and Accounts for the year ending 31 March 2020. These show First Milk continuing to strengthen its milk price, whilst delivering growth in turnover, operating profit and net assets, as well as a reduction in net debt, further reinforcing its financial stability. Commenting on the results, Chief Executive, Shelagh Hancock, said: “The year ending 31 March 2020 saw us deliver business growth and development, further strengthening our financial position, whilst continuing to return value to our farmer members, who own the business. We have also launched our First4Milk Pledge – a broad commitment to sustainable dairy and a celebration of the leading standards on our members’ farms. “Despite the uncertainties around the ongoing Covid-19 pandemic and with Brexit looming, First Milk is well-placed for the future, as a business that has strong collaborative partnerships and the scale to be relevant in the marketplace, whilst remaining agile and adaptable. Our vision for the future remains resolute – we are working together to deliver dairy prosperity.”
Key highlights include: •
Group turnover up 4% to £282.8m (2019: £272.3m)
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Operating profit up 4% to £7.5m (2019: £7.2m)
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Net debt down 20% to £33.1m (2019: £41.1m)
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Net assets up 25% to £39.8m (2019: £31.8m)
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Relative milk price continuing to improve for farmer owners
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First member premium paid out post year-end
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First4Milk Pledge launched
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11% reduction in CO2e emissions year on year
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New share trading platform trades more than 3m shares
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Re-financing completed with Wells Fargo, extending lending facilities to July 2024, demonstrating financial stability of First Milk
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Post year-end acquisition of Lake District Biogas completed
Three new RISS Project Groups get Underway for SAOS
innovation
SAOS is delighted to have kicked off three new Rural Innovation Support Service (RISS) groups. RISS, part of the Scottish Rural Network and led by Soil Association Scotland, provides farmers, foresters and crofters in Scotland with a collaborative way to explore innovative business ideas. Facilitators from partner organisations including SAOS, SAC Consulting, Scotland Food & Drink and Innovative Farmers, help the land manager/s form a working group to develop and test solutions. The facilitator brings in appropriate support from any useful sector – such as supply chain, business, tech, research, marketing - depending on the group’s aim and needs. • Amanda Brown will lead a project working with the larger cheesemakers in the Fine Cheesemakers of Scotland group, to develop a pilot approach for reducing and re-using waste generated during cheese production. About 90% of the volume used for cheese production is converted to whey, the majority of which is currently re-used on their own, or neighbouring, farms by the cheesemakers. Amanda told us: “Through our work we hope to identify other added-value uses for the whey which could generate income, either on an individual basis or by working together to create some scale. We also plan to look at the processes used to determine whether it’s possible to reduce the amount of whey produced. A lot of work has already been undertaken examining whey, however what makes this different is that we are looking through the lens of an artisan cheesemaker. This brings a very different context to what can be done, and the affordability of solutions, as well as the expertise and support needed to make things happen. •
SAOS’s Fergus Younger is supporting a group of farmers and land managers in the Pentlands Regional Park who have formed an association to look at innovative ways to improve public access in a way that’s not detrimental to those who live on and manage the land. During the Covid-19 pandemic, farmers have experienced a surge in problems caused by inappropriate public access. In forming the association, the farmers aim to improve communication between themselves, the regional park and the public, and to work to raise funds to address the poor infrastructure within the regional park. Farming in a designated regional park on the edge of Edinburgh has always thrown up some access-related challenges. However, over a number of years, decreasing local authority budgets have led to a reduced ranger service, and no money at all for infrastructure repairs or improvements. The Covid pandemic has compounded these problems with a massive influx of people that has overwhelmed many areas. Farmers face problems including cars blocking access to farms and fields, dirty camping, littering, gates being left open, stock escaping and path erosion. Fergus commented: “Although most people who access the area are responsible, there has been a large increase in those who are not. On a daily basis, farmers are being forced to clear litter, fix problems, and educate the public on irresponsible activity. As well as taking up considerable time, these interactions are often challenging and unpleasant and can have a detrimental effect on the mental health of the farmers.” With little resource to help with these issues, the farmers were initially helped by NFU Scotland and Scottish Land and Estates to raise the profile of their issues and now, with the help of RISS, it is hoped they can make improvements to the communication and education about the issues and help raise funds to address problem areas.
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The third group, which will be led by Helen Glass and Amanda Brown, will support arable, fruit, veg and bulb farmers, producer groups or agri-co-ops who want to add value through investing in on-site equipment, or through growing new varieties that respond to market and have other advantages such as increased yields or requiring fewer inputs by using agri-tech or automation.
Local Food and Farming Focus for September Promotions
collaboration
By whatever date in September this issue of SAOS Update hits your doormat or desk, we will already have seen Scottish Venison Day and the, frankly mouth-watering, ‘Love Lamb Week’ campaign from Quality Meat Scotland, as well as the various National Farmers Unions’ ‘Back British Farming Day’ on the 9th of September. Unless the post has been delayed, we should however still be in the throes of Scottish Food & Drink Fortnight, which this year will focus on ‘Supporting Local’. All these promotions are all looking to build on the strong support and goodwill for farmers and food businesses that we saw build during lockdown. Keeping up, and building on, that momentum is vitally important as consumers find some kind of new normal and settle down to different ways to shop and how they think about their household’s regular ‘shopping basket’. In the space of a few weeks, the whole food and drink industry had to change the way it operated and the country witnessed a remarkable effort to keep the nation’s fridges and freezers full, whilst businesses of every kind faced enormous disruption. This made for many hidden heroes of the pandemic, and in our last issue we reflected on just a few of the ways that some of our co-ops had been rising to a formidable set of challenges. Nearly everyone in the food and drink industry was rightly deemed to be a key worker, but ironing out teething problems and finding out what was ‘allowed’ made for some pretty hefty challenges, and difficult days, particularly early on in lockdown. Everyone involved, in whatever way, in keeping the country fed and watered, and keeping the food and drink industry afloat at a time of disruption and fear, deserves a pat on the back. This year the spotlight is on producers and the fantastic products that kept the country going during lockdown and beyond, and those inspirational food and drink heroes that kept us inspired with their foodie ideas, shared their skills and produced those fantastic products that became the highlight of our locked-down days. Scottish Food & Drink Fortnight runs from 5–20th September and is the ideal opportunity to capitalise on that public desire to support local, encouraging more people than ever to buy, eat, source and promote local food and drink suppliers. The focus is on the producers behind the products for a ‘Local Legends’ consumer campaign. Scotland Food & Drink will be teaming up with a media partner to promote a series of podcasts, there will be social media and an ‘influencers campaign’ bringing producers, chefs, retailers, bloggers, writers and everyone who kept us fed and watered during the pandemic together, to share their innovations, their experiences and their stories. Keep an eye out, feel proud and, if you can, get involved!
Working together to shape the future of farming and food. If you have any suggestions for future SAOS Updates, or you no longer wish to receive it, please contact: jennifer.grant@saos.coop
Funding for this newsletter is made available through the SRDP Knowledge Transfer and Innovation Fund, which is jointly funded by the Scottish Government and the European Union