For Sale - the Co-op's Stoughton Farm.
Halt the Co-op Farm sale - save the co-operative tradition
Helena Paul & Pete Riley
20th March 2014
The Co-operative Group is in deep trouble. Its response is to sell off its farms, in defiance of all its founding values. Instead it should reconnect with its original purpose, write Helena Paul & Pete Riley, and seek creative and truly co-operative solutions.
The founding values of the Co-operative are at stake here, and the Group will lose all credibility if it simply sells its farms to the highest bidder.
It it best known for its grocery shops, pharmacies, funeral directors and travel business, but is also involved in insurance, legal services, electrical products, farming and - last, but certainly not the least of its problems - banking.
The Group is now in serious trouble, due to poor management and unwise investments, especially in its banking arm. Its 2013 losses are expected to amount to around £2 billion. In response the Group's management has decided to sell the farms.
Fire sale of the Co-op's most valuable assets ...
The Co-op's 14 farms could well be its greatest long-term asset, alongside its founding principles of mutuality and cooperation - which the Group also seems to be abandoning. Its farmland holdings, amalgamated under Cooperative Farms, amount to over 70,000 acres.
The Co-op currently plays a significant role in developing, training and investing in farmers on their farms. One of its farms, at Tillington, is growing up to a thousand varieties of rare and endangered apples. At least one of its packing facilities supports other local growers.
Sadly, given that the farms were originally acquired to supply its shops with wholesome food of known origin, little of the food the Co-op sells today comes from its farms - despite the increasing customer desire for short, secure food chains in the wake of the horsemeat scandal.
According to the Co-op, 70% of its farm production is cereals, sold to other companies. Only 2%, mainly potatoes, goes to the Group's stores. Also the Co-op shops do little to highlight the farms or the good work they carry out - another missed opportunity.
So it's really unfortunate - and in our view plain wrong - that the Co-op has decided to sell off its farms off as its very first option, apparently with little discussion of alternatives and with no consultation with members.
... to land speculators and venture capitalists?
Meanwhle if the land agents Savills make a quick sale of all 70,000 acres to the highest bidder, this large estate could come under the ownership of venture capitalists or pension funds.
They would be likely to hire contractors to farm the land to maximise economic returns, with little regard to the Co-op's current workforce, the rural economy or sustainable long term management.
Moreover, farmland prices are rocketing and prime arable land is now fetching some £10,000 per acre, seven times what it did in 1992, according to Savills. Farmland is seen by investors as a safe haven compared to financial markets.
So what are the alternatives?
The high land prices and serious competition from overseas and domestic investors are leaving aspiring farmers unable to compete, while tenancies are increasingly hard to come by.
There is a real need for access to land to grow food and help to build the fledgling food sovereignty movement in the UK
The Co-operative Group's board could delay the sale to enable the existing work force or Community Farmland Trusts to buy each farm and ensure that they remain under co-operative management.
This would allow profits to be reinvested to build strong rural businesses, boost local economies and allow young aspiring farmers the opportunity to get a start in farming.
There are good examples to follow
The sum of money need to buy the whole Co-op farm estate is huge - likely to be around £700 million. But there are precedents for communities mobilising to buy land to ensure that it is well managed in perpetuity.
An excellent example is Fordhall Farm in Shropshire which is now a thriving community owned farm after over 8,000 people invested a small part of their savings to buy it for £800,000.
Fordhall Farm had been under organic management for 65 years, longer than any other farm in the UK, at the time of its purchase in 2006 and under community management that will now continue. The farm also provides a vital way for investors and visitors to re-connect with farming and food production.
This is something the Co-op Group has also been engaged in at, for instance their farm at Stoughton near Leicester. But this could be lost if the land is sold as a job-lot.
Other co-operative options
There are many options regarding the sale of the land that would ensure that it remained under co-operative ownership.
One is clearly a buyout by the staff of each holding. Another is the formation of Local community Farmland Trusts that could manage the land themselves or provide tenancies for new farm businesses.
The Co-op should also examine the model set by the Ecological Land Co-operative - set up to "buy land that has been, or is at risk of being, intensively managed and lease it to people that have the skills to manage it ecologically and would not otherwise be able to afford do so."
Then there are the Regional cooperative societies, affiliated to but independent of the main Group - and in many cases much stronger financially. They are also potential buyers for Co-op farms in their areas, but may need time to put together and finance bids.
Another option for the Group is to keep its farms - and use them as the source of much of the food they sell in their shops. This was their original purpose and the re-connection of the supply chain from farm to shop would provide customers with a compelling 'Co-operative diffference'.
This opportunity must not be lost
However none of this will be possible unless the Co-operative Board abandons the quick fire sale to pay off the Group's losses.
As these are expected to amount to some £2 billion, against a likely value of the farms of up to £700 million, selling off the farms is unlikely to provide much more than a third of that total.
Instead the board should wait and give time for co-operative and community buyers to arrange the necessary finances on a mutual and co-operative basis.
At present the campaign to keep the farms under co-operative ownership is trying to build pressure on the Co-op Group Board to abandon their plans for Savills to sell the land as a job-lot to the highest bidder.
The founding values of the Co-operative are at stake here. Not only will the Group lose all credibility if it simply sells its farms to the highest bidder, it will also be betraying the trust of generations of members, and undermining the future of co-operation in Britain.
Sign the Petition: Halt sale of Cooperative Group farms (38degrees) - Delay the sale of the Co-operative Group farms to enable like minded groups, such as co-operatives and Community Farmland Trusts, the opportunity to organise finance to purchase the land so that the founding principles of the Co-operative are maintained, and to create opportunities for new co-operative farm businesses to start up.
Write to the Board Chair:
The Co-operative Group
1 Angel Square
Manchester M60 0AG
Or on-line via the Co-op website.
Phone: 0161 834 1212
Attend Co-op members' meetings this spring and support the delay as presented in the 39 Degrees petition. See Members Meeting details.
Helena Paul has worked for 25 years on issues including indigenous peoples' rights and tropical forests; oil exploitation in the tropics; biodiversity, including agricultural biodiversity; patents on life and genetic engineering (GE); and corporate power. She helped co-found GM Freeze and Genetic Engineering Network in 1999 and has been chair of the former ever since.
She has co-authored a number of papers on agriculture, climate change and biodiversity, and the book Hungry Corporations: Transnational Biotech Companies Colonise the Food Chain (Helena Paul and Ricarda Steinbrecher, Zed Books 2003).
Pete Riley was Campaigns Director of GM Freeze 2004-2013. Before that he was Senior Food and Farming Campaigner at Friends of the Earth from 1997-2004. He was a founder of the Five Year Freeze, later GM Freeze, during this period and served on the steering committee from 1999-2005.
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