DEVELOPING and SUSTAINING FARMER ASSOCIATIONS: THE CANADIAN EXPERIENCE

1
DEVELOPING and SUSTAINING FARMER ASSOCIATIONS
THE CANADIAN EXPERIENCE

• Bill Turner
• Chengdu, Sichuan
• January 13-14,2005

2
DEVELOPING FARMER ASSOCIATIONS IN CHINA

• Much has been written about the need to develop
  farmer associations
• Research on the present state of FAs in China
  has been conducted
• There are different definitions of what a farmer
  association is Pilot projects are underway

3
DEVELOPING FARMER ASSOCIATIONS IN CHINA

• Legislation is being developed
• Approaches vary by province and region Some
  farmers are skeptical about collective action The
  Challenge How to develop and sustain farmer
  associations

4
OBJECTIVE OF THIS PRESENTATION

• To outline the policy framework that has
  encouraged and empowered farmers to form
  sustainable associations in Canada

5
FARMER ASSOCIATIONSThe Canadian Context

• An integral part of Canadian agriculture A group
  of farmers working together to achieve shared
  objectives Perform specific functions
• Economic/technical, advocacy, local development,
  information Formal and informal

6
FARMER ASSOCIATIONSDifferent Organizational Forms

• Associations
• Perform advocacy functions
• Non political, Usually not for profit
• Formally incorporated
• Co-operatives
• Economic and social functions
• A form of business organization
• Formally incorporated
• Corporations- shareholder owned

7
ORGANIZATIONAL FORMSAssociations

• Advocacy product promotion, market development,
  co-ordination, standards, certification,
  research, policy development
• Commodity/resource and general focus

8
ORGANIZATIONAL FORMSAssociations

• First tier is local or provincial Examples Pulse
  Growers, Flax Growers, Seed Growers, Organic
  Growers, Soil Conservation Association, Ag
  Producers of Saskatchewan

9
ASSOCIATIONS-continued

• Often are part of national federations
• Canadian Seed Growers
• Canadian Federation of Agriculture
• www.cfa-fca.ca
• The farmers voice in industry groups
• Canadian Seed Trade Association
• Dairy Council of Canada
• Canadian Agri-Food Research Council

10
ASSOCIATIONS-continued

• Some informative websites
• Ag Producers of Saskatchewan
• www.apas.ca
• Canadian Pork Council
• www.cpc-ccp.com
• Canadian Seed Growers Association
• www.seedgrowers.ca
• Western Grains Research Foundation
• www.westerngrains.com

11
ORGANIZATIONAL FORMS Co-operatives

• Economic functions farm inputs and services,
  marketing services, financial services (loans,
  savings), processing, retailing
• Owned and controlled by members
• Operate to earn a profit
• Reinvest in local infrastructure
• Distribute profit to members

12
CO-OPERATIVES-continued

• Co-ops are part of larger federations
• Federated Co-operatives Ltd.
• Owned by 300 local co-ops
• Credit Unions (finance)
• Canadian Co-operative Association
• Large processing co-ops
• Dairy and Poultry
• Large grain marketing co-ops have almost
  disappeared

13
CO-OPERATIVES-continued

• Websites
• Federated Co-operatives (retail)
• www.fcl.ca
• Gay lea Foods (dairy)
• www.gaylea.com
• Lilydale Foods (poultry)
• www.lilydale.com
• Canadian Co-operative Association
• www.coopcca.com

14
ORGANIZATIONAL CHARACTERISTICS

• Independent of government
• Exist as legal entities
• Local organization is the foundation of larger
  provincial or national associations (i.e.
  bottom-up approach)

15
FACTORS INFLUENCING DEVELOPMENT

• Market or government failure
• Presence of development agents
• Existence of a legal framework
• Supportive policies and programs
• Social / cultural conditions
• Access to capital / credit

16
DEVELOPMENT AGENTS

• Work closely with farmers
• Identify needs and opportunities
• Provide encouragement guidance
• Gather and share information
• Allow farmers to make the decisions it is their
  association!
• This is how development begins

17
DEVELOPMENT AGENTS

• Agents include
• Government university personnel
• Community religious organizations
• Other associations businesses
• Farmers must trust agents to act in their best
  interests
• This is a challenge for government

18
LEGAL FRAMEWORK

• Gives associations the power of a legal person
• Enter into contracts
• Take ownership of assets
• Obtain credit, raise capital
• Limits liability of members

19
LEGAL FRAMEWORK

• Defines the ownership and governance structure of
  the association
• Member rights member control
• powers of boards of directors
• financial reporting
• auditing standards
• Capitalization

20
LEGAL FRAMEWORK

• Protects the public interest
• As a legal person must adhere to the countrys
  laws
• Registration of charter requires annual filing of
  documents
• Guards against formation of false associations
• Provides consistency in the development of
  associations
• Consistency offers more effective use of
  resources that support associations

21
LEGAL FRAMEWORK

• Recent trends in Canadian legislation
• Harmonization between national and provincial
  governments
• Close consultation with the affected sector on
  the drafting of legislation
• Legislation provides a framework and not a
  recipe
• Emphasis on articles and bylaws
• Member rights

22
SUPPORTIVE POLICY FRAMEWORK

• A legal framework is necessary but not sufficient
• Need a hospitable policy framework
• Largely a government function -requires a
  delicate balance between being supportive and
  being controlling
• Governments can partner to deliver programs

23
SUPPORTIVE POLICIES AND PROGRAMS

• Extension personnel that work closely with
  farmers to assist in forming associations
• Training programs for farmers on how to govern
  their associations
• Training programs for people who wish to become
  managers of associations

24
SUPPORTIVE POLICIES AND PROGRAMS

• Development of training materials
• Start up assistance
• Funds to assist with planning / feasibility study
• Access to professional advice
• Access to Capital
• Crown lending agencies
• Credit Unions
• Loan guarantees
• Support for third party Development Groups
• Sask Council for Community Development
• Regional Development Associations

25
SUPPORTIVE POLICIES AND PROGRAMS

• Formation of partnerships with farmer
  associations or industry groups
• Example Canola Council of Canada

26
SUPPORTIVE POLICIES AND PROGRAMS

• Partner with groups or associations outside of
  government to deliver training and professional
  services to farmers and farmer associations
• Canadian Farm Business Management Council
• Centre for Agribusiness Training and Education
• Universities

27
SUSTAINABLE FARMER ASSOCIATIONS

• A consistent source of revenue
• Well trained, professional management
• Effective and committed leadership
• A strong identity
• Tangible member benefits

28
KEY LEARNINGS FROM THE CANADIAN EXPERIENCE

• The bottom up approach works best
• Development is slow to start
• Work with farmers at their level and in their
  community
• Establish a trust relationship
• Start with something that is manageable
• Use a methodical , step by step process to start

29
THE START UP PROCESS (Canadian Approach)

• Identify the opportunity
• Examine the market
• Do a needs assessment
• Clarify the functions for an FA
• Create awareness among farmers
• Meetings, written material, media, etc.
• Work with a small group of trusted leaders to
  develop a proposal and gain consensus

30
THE START UP PROCESS

• Do a pre feasibility study
• Research economic aspects
• Create initial budget
• Build consensus among larger community of farmers
• Communicate proposal to farmers
• Set up Steering Committee from among the farmers
  who are interested in participating

31
THE START UP PROCESS

• Do more in depth research
• Full feasibility study
• Detailed business plan
• Determine organizational structure
• Conduct membership drive
• Sign up members
• Raise capital, secure financing
• Establish legal entity

32
THE START UP PROCESS

• Hold first annual meeting
• Elect officers
• Hire manager and staff
• Acquire necessary facilities equipment
• Begin operations

33
THANK YOU