Successful collaborative dairy ventures

At a recent NFU Cymru Milk board meeting members heard of the positive work that is being undertaken through the Improving the Welsh Dairy Supply Chain project to help farmers understand the concepts and the advantages of collaborative or joint ventures.

Milk Board members learnt how new entrants can find it extremely challenging to find the finances to rent and operate to the scale that is needed, whereas established farmers often find it hard to expand their current unit, as well as retaining herdsmen and developing their staff.  Having the right joint venture in place allows both parties to farm together and can lead to benefits such as sharing responsibilities, opportunities for holidays and increased options to improve profitability.

Employees can often develop from workers to owners which in turn can make them focused and enthused about their careers as they gradually progress towards working for themselves. Owners and established farmers frequently have a new lease of life as there is someone to share their ideas with, and someone with the energy to do the day to day tasks whilst driving the business forward.

Collaboration Officer Dafydd Thomas said, "For any joint venture to be successful, it is important to match individuals who have the same goals and objectives. It is imperative that good communication is nurtured between both parties in order for any issues to be resolved quickly and efficiently.  Having a sound agreement in place from the outset can often aid communication and with both parties benefiting, many ventures remain in place well beyond their original timeframe."

Tony Evans, a consultant from the Andersons Centre who provides the technical advice for the project said, "It is important to have the right contract in place to reward both parties. Rather than spending time and money drawing up new contracts, we use the standardised templates that DDC and DairyCo have published."

In a quick straw poll of NFU Cymru Milk Board members remarkably 14 out of the 25 board members were already in a joint venture. However, when questioned, only seven of the 14 had a legal agreement in place. Under the Partnership law that dates back to 1890, in the event of a death to one of the partners within the business, without a written agreement, all assets to the business would have to be sold on the open market. This highlights how important it is to have a legal and written agreement in place. 

Through the project, farm visits and workshops are arranged to illustrate working examples of joint ventures which provide farmers with an opportunity to ask questions and gain a farmer perspective on how the different agreements work on a daily basis. The project also provides farmers with all the information they need to make an informed decision on whether to proceed with a joint venture or not.