A new vision for agriculture
momagri, movement for a world agricultural organization, is a think tank chaired by Christian Pèes.
It brings together, managers from the agricultural world and important people from external perspectives,
such as health, development, strategy and defense. Its objective is to promote regulation
of agricultural markets by creating new evaluation tools, such as economic models and indicators,
and by drawing up proposals for an agricultural and international food policy.
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  Editorial  
 

Going global:
Seven French cooperatives among Europe’s Top 20



Arnaud Carpon, Editor in Chief


Article published in Terre-net Média



France is the best-represented country in the ranking of the Top 20 agricultural cooperatives. Between 2008 and 2013, the Top 10 French cooperatives reported a 7.4 percent annual growth.

Cooperation in agriculture is one of the key French economic sectors that did not fall into recession in the past five years, maybe because cooperative businesses seek to expand their operations where growth exists––in Asian, or even African, emerging markets.

The participants to the conference organized by La Coopération Agricole and by Les Echos Events on September 23, 2014 precisely presented how these cooperatives are going global, and outlined their successful strategies!

According to the audit and consulting firm PwC, French cooperatives are doing better than their foreign competitors: Among the seven businesses included in the Top 20, three of them integrated the ranking last year, and between 2008 and 2013, the Top 10 achieved a 7.4 percent annual growth rate, against 7 percent for all cooperatives ranked in the Global Top 50. However, the cooperatives from Northern Europe––The Netherlands, Denmark and Germany––are ranking in the first six places of the Top 20.

Yet the seven French cooperatives achieved Europe’s best sales (€32.4 billion) in 2013. In 2008, they only accounted for €20.6 billion, but they were fewer names in the ranking.

For Philippe Mangin, President of Coop de France, these figures are hiding the global loss in the cooperative sector last year, with a sales increase limited to 0.6 percent and a 2.6 percent decline in operations compared to 2012. He regrets that order books of foreign agribusinesses are filled for the coming years, contrary to those of French competitors!


ORDER BOOKS ARE FILLED, EXCEPT IN FRANCE!

The growth of the largest French and European cooperative businesses is first driven by significant changes “to safeguard the global food supply chain and to further impact markets,” indicates the audit and consulting firm PwC.

“Size is one of the six key levers engaged to meet this challenge, together with the internationalization of their activities, the upstream and downstream vertical integration of their operations through acquisitions or partnerships, the expansion of strong brands, innovation and the development of inclusive sectors with other private or public stakeholders.”

For many agricultural cooperatives, the race to achieve a critical mass is crucial to impact markets. The goal of this restructuring “is to be as close as possible to markets, and to be more competitive through lower production and logistics costs. Executives are adopting various strategies, from export to local establishment,” adds PwC.

But for cooperatives, “going global”, to quote the title of the Echos Events conference, cannot be achieved at the expense of the domestic market. This is why it is done first though regional groupings in a national framework.

In addition, France benefits from considerable assets for exporting high-value products for which it is well positioned. Yet this is not enough to offset its competitiveness problems regarding “entry price” products, for which foreign competitors are gaining export market shares. The French poultry market is a very good example: 87 percent of the meat used for institutional catering is imported!

As a result, “entry price” industrial farming is disappearing and cheap products are massively imported in France to meet the demand from consumers with limited purchasing power. Yet, our nation could produce them!

The restructuring of cooperatives is driven by population growth (especially in Africa and Asia), the growing power of emerging nations, increasing urbanization of populations, climate change, scarcity of natural resources and technological breakthroughs.


FINANCIAL INNOVATION

The restructuration of cooperatives is based on innovative funding through industrial and financial partnerships. Some cooperatives are taking on private debt, and some restructuring leads to discarding some operations to focus on others that are generating higher added value.

For farmers, the issue of international development is to gain added value without altering the ties to their cooperative. Consequently, explaining and showing them this fact will make them support the growth of their cooperatives.


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Paris, 11 December 2018