Department of Agriculture and Water Resources, April 2016
These case studies share examples of existing farmer collaboration
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- GFC was formed in 1950 to maximise value for producers and return value to members.
- Over 60 years, the GFC has transformed the lobster industry, leading to international recognition and demand and now generates over $420 million in annual export turnover.
- The co-operative provides complex supporting operations, from administrative and financial services through to export.
- Innovative culture has supported expansion into 18 export markets including Japan.
- Challenges exist, including opposition from competitors and lack of resources, but benefits can be great.
- To succeed you need scale, control and integration along the supply chain.
- For further information visit agriculture.gov.au/cooperatives
When enterprising lobster fishermen in Geraldton, Western Australia, formed the Geraldton Fishermen’s Co-operative (GFC) in 1950, they were determined to gain a better deal from their efforts. Their ambition was to wrest control of the value chain from their bosses, the processors, and claim maximum value for themselves, the producers.
The GFC’s original members spent their mornings catching lobsters and their afternoons constructing the factory that would process their catch. The bricks they made laid the foundations for their expansion across the supply chain, building a business that today generates $420 million in annual export turnover.
In the 60-plus years since, the GFC has had a transformative impact on the lobster industry. Its marketing and technological advances have earned international recognition and demand for its Brolos brand.
Its success can be attributed in great part to its adherence to its founders’ vision, says CEO Wayne Hosking: ‘The only reason that we exist is to return value to members.’
While this goal sounds simple, the co-op’s operations supporting it are complex. GFC’s services and infrastructure spans members’ fishing needs, from delivery of bait to picking up of live product, a marine chandlery, a hard stand (for boat storage) and two boat lifters. It provides all administrative and financial services, and all product-handling services, including processing, marketing, market development and export.
Its innovation culture is one of the co-op’s critical success factors, he says. Innovation in product development and handling has supported its expansion into 18 export markets, including the premium-quality Japanese market. It will become the first Australian company to establish an integrated seafood operation in mainland China when it opens its own company and facilities in Guangzhou (scheduled for late 2015). ‘This offers a massive opportunity for us to further integrate into the market, and to do all the things we’ve been prevented from doing in China before—supplying, marketing, distribution and branding,’ Wayne says.
The co-op model offers great potential to gain massive power over the value chain for producers who recognise that it is a business, not a ‘feel-good thing’.
To succeed you need to get the scale, get the control, and then start to integrate down the value chain and direct the value back to yourselves.
You will have a very tough time to get off the ground but if you succeed, the benefits are enormous.
GFC’s founders faced many of the same challenges that a start-up producer co-op faces today, he says, including intense opposition from established competitors, and lack of resources in terms of capital, market knowledge and management.
He believes that the co-op model still offers great potential to gain ‘massive power’ over the value chain for producers who recognise that it is a business, ‘not a feel-good thing’.
‘It’s a standard business model. To succeed you need to get the scale, get the control, and then start to integrate down the value chain and direct the value back to yourselves.
‘The other thing to understand is it’s a dog-eat-dog world, and co-ops are a threat to other participants in the value chain. So unless members are prepared to start with a significant scale and to invest in decent facilities and good management—you will not survive.
‘You will have a very tough time as it struggles to get off the ground but if you succeed, the benefits are enormous.’
These case studies were compiled by RIRDC to share examples of existing farmer collaboration.