Milking the supply chain formula

This post by Marian MacDonald Bring on the Cows demands a New Routine has inspired me to write a post about one of my favourite topics.

 How do we deliver affordable, nutritious, ethically produced food to Australian consumers and ensure that EVERYONE in the supply chain chain gets their fair share of the return on investment?

One way we (farmers) can do this is to own the the really big players in the supply chain and farmers have tried that.  Lets use farmer group Wesfarmers as an example.  Wesfarmers bought Coles and look how well that turned out for farmers Coles admits to threatening suppliers.

If we go back to Marian who is one of the many Australian dairy farmers who own the milk  cooperative  Murray Goulburn (MG) we have an example of farmers owning the other end of the supply chain – the raw product and its manufacturer.

Is it also a great example of beneficial outcomes for farmers and if not why isn’t it working.?

I think this statement by  MG CEO Gary Helou gets to the core of the majority of farmers supply chain challenges.

“We are not farmers; MG is a global dairy food processing and milk company, and we will not be buying farms directly; that is not our business,” Helou says adamantly.

Yes Mr Helou is right when he says  ‘MG is a global dairy food processing and milk company,’ but he is is very wrong when he says ‘We are not farmers’.  Rubbish Murray Goulburn IS farmers. Farmers who also own a very large ‘global dairy food processing and milk company’ and farms are a BIG part of MG’s business. MG have a co-operative structure partnership with thousands of them – over 3000 in fact.

Mr Helou is not alone in forgetting the importance of a ‘we are all in this together’ communication strategy and mindset when talking to stakeholders, farmers have an equal role to play here.

Sadly this  ‘them and us’ mindset has become so entrenched, victim mentality rules and farmers feel disenfranchised

How many farmers do you meet who have regular meetings with their supply chain partners?

How many farmers do you know that proactively engage with processors and supermarkets to develop mutually beneficial relationships ensuring value is delivered at all points along the supply/value chain.?

I can count the number of farmers I know that do that on one hand.

If you are like me and agree the only way forward to achieve a profitable and sustainable agrifood sector future is strong, healthy supply chain relationships in which our farmers are empowered, active participants then we need to change the current culture of ‘talking and doing’.

I believe the first question we need to ask to is WHY  the current supply chain culture that greatly disadvantages farmers ( and almost everyone else except the supermarkets) exists and once we have a consensus on the WHY lets figure out HOW we change it and  then DO it.

Back to the owning parts or all of the supply chain

Its the old adage “it doesn’t matter how good the concept its the people that make it work’

Everyday the supply chain gets more complex,everyday farmers are losing contact with consumers. everyday supermarkets get bigger and more powerful.

If farmers want to ensure they are not gobbled up by the challenges and have the capacity to grab the opportunities then we must be as active beyond the farmgate as we are on the farm


MacDonald’s is a great example of recognising the need to build, maintain and communicate strong supply chain relationships 

Author: Lynne Strong

I am a 6th generation farmer who loves surrounding myself with optimistic, courageous people who believe in inclusion, diversity and equality and embrace the power of collaboration. I am the founder of Picture You in Agriculture. Our team design and deliver programs that inspire pride in Australian agriculture and support young people to thrive in business and life

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