Lower Saxony Groups
An example of the type of collaboration that takes place in other parts of Europe where there is a very different structure to the sugar beet industry.
Lower Saxony in Germany stretches from the North Sea to the Harz Mountains. Farm size is typically small with the average holding approximately 50ha. Given this smaller holding size there is greater focus on co-operation to attain the level of efficiency needed to compete.There are three stages of collaborative activity in this example; lifting, loading and haulage.
Stage 1: Lifting collaboration
Zuckerrüben Nettlingen GbR is a cooperative of twenty farmers who coordinate their beet lifting activities. The company lifts some 634ha of group beet, as well as a further 86ha of contract beet.
The group owns its own beet harvester, a Ropa Euro Tiger, which is replaced every five years and is operated by the members.
One of the farmer members works as a part-time group manager and co-ordinates all activities amongst the group. The lifting programme is set out at the start of the season and while individual farmers are consulted, they must fit in with the plan, which is largely determined by soil type. The short beet season in Lower Saxony means they need to lift 24 hours a day.
Farmers retain their individual quota and there is no price adjustment for early or late lifting with the belief that any yield advantage or disadvantage is balanced by the timing of drilling for the subsequent crop which is usually wheat.
All costs are charged to the group and at the end of the season recharged to members. The cost for lifting in 2005 season was £122 per hectare (£50 per acre).
Stage 2: Loading collaboration
The members of the lifting group are part of a larger loading group, BHS Maus GbR, a group of 65 farmers. In 2006, the group loaded 160,000 tonnes of sugar beet, from within its operating area (a 9 mile radius of Lahstedt).
The group has a part-time manager, who is also a farmer member. The loader is driven by members and is fully co-ordinated with lifting, thus operating 24 hours a day.
The loading machine has GPS which recognises the farm location and gives a printout of key data. The group also co-ordinates activity through its website for farmers and hauliers as part of its communication activities.
In the early season, the beet is loaded the same or next day as it is lifted, later in the season this may increase to three days. Like the harvesting group all costs are charged in and recharged to members at the end of the season.
The company charges £1.27/tonne for loading which allows for a small a profit/tonne for contingency or reserve of £13,739 in 2005.
Stage 3: Haulage collaboration
Members of BHS Maus GbR are also shareholders in Transportgemeinschaft (TG) Wierthe GmbH, a limited company which delivers 400,000 tonnes of beet into three of Nordzucker's factories within Lower Saxony (one of Europe's largest beet processors).
Approximately 250,000 tonnes of beet is delivered on twelve trucks hired in specifically for the beet season, while the remaining 150,000 tonnes of more local beet is delivered using tractors and trailers.
A farmer member in each area co-ordinates transport and interestingly the haulage allowance always covers costs.
This co-operative activity benefits farmer members in the following ways:
- Highly cost effective so costs for small producers are as low as the larger highly efficient growers
- Very well co-ordinated at the three levels of lifting, loading and storage
- Enables the best equipment to be bought and used
- Overcomes the difficulties of short lifting season and small field sizes
- As an example one grower in Lower Saxony albeit with higher than average yield has total production costs, including seed, fertilizer, sprays, drilling, lifting and haulage of less than £10 per tonne.
EFFP and NFU wish to thank Strutt & Parker for the research of this case study.
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