Connecting Farmers and Customers
A group is the UK is bringing the supply chain together with an innovative scheme to meet the needs for transparency and fairness. Editor of ThePigSite, Jackie Linden, outlines the highlights of the new scheme, which was presented by Rob Cumine of FarmFirst at the last JSR Technical Conference.
13 February 2009
5 minute read
The 2008 JSR Technical Conference programme included a presentation on an innovative scheme to bring together the elements of the food supply chain from farmer to consumer.
The scheme was set up by the FarmFirst Group, and described by Rob Cumine whose career has included agri-consultancy and six years as Agricultural Manager for supermarket chain, Marks and Spencer. In 2008, he joined the innovative dairy business based in Bristol called FarmFirst that spans the agri-food supply chain from farming to dairy processing that is also taking its first steps towards developing an integrated beef supply chain.
FarmFirst Ltd
Mr Cumine identified the most significant drivers in agriculture in the UK today as the EU Common Agricultural Policy, the Curry Commission (into antibiotic use in animal production), increasing disposable incomes and the growing interest in food, largely through celebrity chefs.
"Consumers are looking for products that are organic, British, regional, rare breed, not genetically modified and fully recyclable," joked Mr Cumine.
On the other hand, there are considerable challenges in this new world, including rising energy prices, food shortages and climate change, which are leading to rising input prices, greater volatility in the markets and increasing regulation.
"Planning and investing for the long term are increasingly becoming a lottery," Mr Cumine said.
What do Customers Want?
Mr Cumine asserted that customers want clear differentiation of products based on value, quality, functionality and provenance. They also want consistent delivery of that product, food safety including traceability, and objectively measured performance on issues of social responsibility, which include animal welfare and the environment. And above all, they want transparency, Mr Cumine said.
As he pointed out, this does mean a number of paradoxes: local food at global prices, indulgent food that is good for you, organic fruit and vegetables without blemishes and food available for an individual customer but everywhere.
A tall order, indeed.
What do Farmers Want?
Mr Cumine identified that farmers are looking for certainty of the final market, long-term business security, the ability to be rewarded based on performance, the opportunity to earn better margins with access to the best advice and inputs, and they want to be part of the team connecting with the customer. In short, they, too, want transparency.
Farm assurance schemes, asserted Mr Cumine, are not product quality schemes, nor marketing schemes, nor do they offer much of an assurance when they are based on infrequent inspections based on historical data. And neither are they a good defence against imports.
The New Value Chain: Theory and Practice
A value chain, explained Mr Cumine, is a chain of activity and at each stage, value is added to the product. It is the chain of activities that adds more value to the product that the sum of all those activities.
From the customer's perspective, agriculture can affect a product in a wide range of ways, including price and availability, visually, for health, eating quality, social factors, environmental impacts and animal welfare.
So the FarmRight vision, he explained, was to create a joined-up agri-food supply chain that facilitates the flow of product and information from farmer to customer. The process must either add value or increase efficiency of the supply chain to be a success.
At that time, FarmRight had two elements: MilkRight and BeefRight.
The system includes, for example, verification of drug and feed products supplied to each participating farm, with files being sent directly from the supplier to the FarmRight database, with regular feedback to the farm as a management form.
So for each dairy farm involved in the scheme, full information can be supplied from one point covering a range of information from the size of the herd through to data on individual cows (yield, calving and veterinary history etc). To satisfy the growing demand for data on environmental issues, there is also a Carbon Emission Report, which shows the farmers each month the use of fertilisers, electricity, diesel etc.
Mr Cumine emphasised that this is a quite different type of contract: payment is based on measurable outcomes of value to the customer and underwritten by the supply chain; and the payment system rewards performance.
In fact, it is an example of Supply Chain Utopia, concluded Mr Cumine. There is coordination of the supply chain and information flow and all parties earn a fair reward for their efforts. They must be willing to accept change, and the funding of R&D becomes the responsibility of everyone.
February 2009
