2. The Agenda Development in farming over time Economies of scale Agri-cooperatives and their role in regard to exploiting economies of scale
3. Development in farming over time Seventies Nineties Tenths Thirties Fifties Production Optimization Sustainability Optimization Sustainability Optimization Production Mechanization Information and communication technology Precision farming Many small farms Few large farms Labor intensive Capital intensive
14. Structural development in Danish dairy farming The same amount of milk as in 1984 is being produced by only 12% of the farms
15. Economies of scale drive structural development in agriculture Economies of scale exist as large farms can better exploit productivity gains related to technological developments Long run average costs Constant returns to scale Diseconomies of scale Economies of scale Quantity produced
16. Economies of scale in dairy farming in EuropeBased on information from typical farms Source: IFCN Dairy report 2010
17. The characteristics of cooperatives They are owned by farmers They are controlledby farmers The benefits generated are accrued to the farmers based on their use
18. The characteristics of cooperatives Open membership: “naked in and naked out” “Equal pay for products possessing same quality” “One man one vote” The mission of the cooperatives is to benefit farmers economically through Lower input prices Higher product prices
26. The farmers become more heterogeneous – the big farms deliver a larger share of the milk
27. The role of co-operatives in exploiting economies of scale Collection costs The co-operatives should include production quantity in their price/cost setting Quantity collected
28. Co-operatives constantly need to adapt in order to be competitive and attractive to farmers We are obliged to modernize the co-operatives. We have to respect and understand the big differences between our members Ove Moeberg, former chairman of Ala Foods Jyllands-Posten 2008 The current trends lead to discussions, we compete with globalized commercial corporations. If we are to survive, we have to be attractive to the very big producers Jens Jørgen Henriksen, TICAN Jyllands-Posten 2008
29. Integration and coordination provide competitive advantage Low transaction costs Facilitating integration and coordinated actions
30. In conclusion Economies of scale: Exist so larger farms can better exploit productivity gains related to technology Demands access to capital: Owned or borrowed Co-operatives Have facilitated farmers’ access to capital by mitigating risk Associated with the producers’ sale of raw products Through product development and composition Have not only facilitated economies of scale, but also enabled specialization Can facilitate economies of scale at producer level by including production volume when shaping pricing models Provide competitive advantage Through close coordination and integration in the value chain Recycling of capital makes room for long-term investment thus sustaining competitiveness 27. juni 2011 19...|
