A taskforce involving the local horticulture sector and facilitated by the Ulster Farmers’ Union (UFU) and CAFRE has been set up to discuss how the sector could co-operate more closely in the future.

In particular, the group is to look at the merits of growers becoming part of a producer organisation (PO), something which is legislated for and financially supported by the EU.

Last week, local fruit and vegetables growers were invited to Greenmount to a meeting organised by the UFU to discuss how a possible scheme might work. In many ways, it felt that we had all been here before – a very similar meeting, with some of the same speakers, was held in March 2013. So, what has changed since then?

In the intervening period, the message from the industry is that producer margins have been squeezed to such an extent that there is now a realisation that something must be done before growers are forced out of business. The challenge now will be to find like-minded individuals who are determined to make something happen.

More broadly, there is also some impetus within the union to try to do something proactive to help members, whether it is a new pricing model in dairy, or a PO in the horticulture sector.

New UFU president Barclay Bell was clear that he will support such initiatives in whatever way is necessary.

It should also be noted that the other main change since 2013 is that POs can now be established in a range of sectors, not just horticulture. There are up to 5,000 POs operating across mainland Europe, mostly in the fruit and vegetable sector. There have been attempts made in Britain to form a dairy PO, while in the Republic of Ireland legislation is now in place for beef farmers to join together within such a structure.

Any scheme that is set up in NI will be administered by the Rural Payments Agency in Britain. It comes with a number of rules, including that all members’ produce must be marketed through the PO.

Despite other countries seemingly being a step ahead of NI, we have an excellent example of a successful PO in the form of Northway, based at Blackwatertown, Co Armagh. Originally established in 2000 as Northway Mushrooms, it now represents 30 mushroom growers producing around 35,000t of mushrooms each year.

Two years ago, Northway sought to broaden its product base by adding the output from five local strawberry growers into the mix. It means that turnover is now around £50m per year.

With assistance from the EU available for up to 4.1% of turnover, Northway is able to draw down over £2m of European funding each year, which can be match-funded from own resources to give an operational programme of around £4.3m annually.

That money is used to provide the best technical advice to growers, identify new technology to help lower costs and also to develop the Northway brand with sales to retailers, wholesalers and foodservice customers.

Meanwhile, a £20m investment by Northway growers is due to begin soon on a new compost yard in NI to produce 1,100t per week of phase three compost. At present, that compost must be imported from countries such as Holland.

Plan

However, perhaps the most important part of the PO is the ability to plan production to meet market requirements. “You have got to get supply to match demand – there is no point producing product that cannot be sold,” said Northway CEO Elaine Shaw.

With demand for mushrooms typically down by 20% over the summer, growers will cut production by an equivalent amount, before volumes increase again going into the autumn. That is about managing the price to prevent severe price falls, although ultimately it is the market that sets prices, not the PO.

Sharing

As Northway has developed, one of the other main benefits for growers has been the sharing of knowledge and information within the group. It is a point made by Northway grower Frank Donnelly from Keenaghan Mushrooms, who has recently completed a major investment in Dutch shelving on his farm. “I couldn’t have done it without the advice of the other growers,” he said.

His warning for any group thinking of setting up a PO is to take your time and get the right people involved.

“People must stick together, and have the right ethos – if someone is willing to leave if they are offered an extra £10 per bin from another outlet, then it won’t work,” he said.

He also acknowledged that there will probably be resistance from processors, who generally are uncomfortable with the idea of producers working together. But Donnelly maintained that, over time, a PO can build trust with their customers. “You actually will deliver a better, more consistent product to a processor. We have also found that supermarkets like dealing with a PO because it is simpler for them rather than dealing with an individual farm,” he said.

Future options

So, where does that leave NI fruit and veg growers keen to try to improve their position in the supply chain? Ultimately, they have three options:

  • Get together and form a new PO in NI.
  • Join with a PO in Britain and market their produce through them.
  • Join with Northway.
  • At the meeting in 2013 that third option was put forward by Elaine Shaw as a realistic alternative, but she is perhaps a little more cautious now.

    Developing a market for strawberries over the past two years has taken a lot of her time.

    “A new fruit or veg offering would add to our product range, but ultimately what technical advice, turnover and resources would come? If a sector could bring expertise it would make a big difference,” she said.

    The meeting last Tuesday has left growers with much to ponder.