MAIN CHALLENGES FARMERS COOPERATIVES ARE FACING

From the labour shortage to an under implementation of new technologies to miscommunications with farmers and through to the fear of a potential ag trade war, cooperatives seem are currently in a period of critical development and change.

Let’s introduce each one of these problematic:

THE ISSUE OF LABOUR SHORTAGE- IMMIGRATION (click here for full article)

Farmers and cooperatives throughout the agricultural sector agree that labour shortage and current immigration policies are one of the main challenges US agriculture is facing.

Considering that about 60 percent of the agricultural labour force is represented by immigrants (Chuck Conner, president of the National Council of Farm Cooperatives, a trade group, and former deputy agriculture secretary during the George W. Bush administration), the question now relies on how current immigration policies are affecting the sector and if it would be possible for farmers to continue their operations considering Americans won’t do the work immigrants do.

In Politico’s article “Farmers: Trump terrible for agriculture” Mr. Castañeda, a farm labour contractor in San Luis Obispo County in central California said, “There are growers out there screaming for labour”. “The people who are coming in are doing the work that not a single American would like to do.”

On the same line, Frank Muller, who grows tomatoes, peppers, almonds and walnuts on his California farm said, “My farm would shut down today if you removed my … workforce” “You hear all these disparaging remarks about immigrants, but these guys are the hardest-working, most dedicated people … I’ve ever seen in my life.”

AG TRADE WAR (click here for full article)

American farmers are a vital part of US economy, and they are now facing a precarious position, as the fear of a trade war escalates.

China, one of the biggest economies and the largest commodities consumer in the world, is not hiding its discontent towards the Trump administration and it is hitting it right in its natural resources.

Since they started imposing additional taxes on American fruits, nuts, pork and wine last April, the world knew this would be the start of something bigger. Nevertheless, this situation was speculated by analysts, considering Trump tariffs on steel and aluminium.

China explained that they will start with a round of tariffs on $34 billion worth of U.S. agricultural products, as well as automobiles, starting July 6th.

Considering the biggest hit is on agricultural commodities, this impacts not only on the economy of the nation, but directly on the household economy of farmers, many of them Trump voters, that trusted the republican to engage on better relations with a big player like China.

Products affected range from soy, corn, wheat, rice, sorghum, beef, pork, poultry, fish, dairy products, nuts and vegetables.

The list covers almost all farm products imported from the U.S., said Li Qiang, chief analyst with Shanghai JC Intelligence Co. Ltd.

MASS ADOPTION OF TECHNOLOGY IN THE AGRICULTURAL SECTOR (click here for full article)

Appropriately incorporating precision Ag technologies can improve the efficiency of farming operations by reducing costs and increasing grower incomes. However, according to Rabobank Senior Research Analyst, Ben Zuckerberg, currently, fewer than 5% of farmers are implementing some form of digitalised practices on their farmland. But why is this, and what can a farmer expect to achieve from true digitization across their farm space?

Zuckerberg states that there are five key impediments to Precision Ag adoption, barriers that growers and data scientists have validated during three years of field research:

1- Many new software technologies don’t have a clear identified return on investment (ROI).

2- Many farms don’t have the necessary AgTech infrastructure to support the integration of new technologies – “Trying to get farmers to purchase both IT hardware and software is hard enough in a favourable commodity price environment, as farmers are typically resistant to change, given the ‘family tradition’ and experience-based nature of farmers,” the report points out. “Trying to do this during a downturn in the crop cycle is, and has been, nearly impossible.”

 3- Selling software as a service to financially strapped customers is a difficult revenue-generation strategy. Zuckerberg suggests a better strategy may be to offer farmers free software while selling premium add-on products to the independent agronomists and crop consultants who advise these farmers.

4- Big data security and privacy related issues are proven to be one major holding back factors. You can read more about these here.

5- Digital agriculture still lacks a universal operating platform. Zuckerberg understand there should be a standardized operating system that can “upload, store, validate, refine, cleanse and analyse” data. His prediction: This will happen, and it will probably come from outside the industry.

Though some of the challenges farmers coops are facing are related to the agricultural sector in general, a specific and critical challenge for the coop has advanced in increasing miscommunications between themselves and their farmers.

THE IMPORTANCE OF COMMUNICATION IN COOPERATIVE AGRICULTURE (click here for full article)

No organisation’s existence would be possible without proper, fluid and flawless communications between its members. Communication is essential for today’s cooperative and makes it possible for these bodies to overcome external challenges that will benefit the agricultural community as a whole.

Since a coop’s main objective is to create benefits among their members (usually benefits that the latter would not be able to achieve individually) it is crucial for the modern farmer to trust, engage, and communicate properly with their cooperative.

According to Strategic Initiatives Vol. 1 by The Hale Group, managing internal conflict can be a bigger challenge for some cooperatives than remaining competitive in the marketplace. 

From their research, the main internal communication issues rally between:

1-Membership Distrust of Management

2- Conflict Between Large and Small Members

3- Members’ Misunderstand Industry Conditions

4- Inherent Conflicts of Interest on the Board

Consequently, members who lack understanding of internal practices are conflictual and are more prone to have a negative attitude towards their cooperative, possibly leading to weaker performance by the coop.

To address these challenges, we have developed AG40 workshop, a programme designed around bringing key stakeholders from throughout US agriculture together to tackle the most issues in relation to the stability of the market. To find out how this will be achieved, and whether you can be involved in this, follow the link here and below:

www.challenge.org/ag40

ABOUT AG40

Challenge Advisory is bringing together AG40, a unique workshop where organisations will have the ability to network amongst each other for precise and profitable resolutions across the entire industry. There will be panel discussions and workshop sessions designed to create partnerships and profitable business development, helping to find cross-specialism solutions to current sectoral challenges.

Join Challenge Advisory and all our stakeholders for education, interoperability and investment relating to the latest technology in digital agriculture – click here to find out more:

www.challenge.org/ag40