finding sustainable solutions for agricultural organizations

Alliances and mergers have long been the norm in the business world. Consolidation in banking, insurance, retail and manufacturing sectors are ongoing and have led to the creation of large, multi-faceted conglomerates. The reasons are many, including streamlining of operations, expansion of product lines and acquisition of new markets.  

It's no longer just limited to the corporate sector, however. Increasingly, Canada's agricultural organizations are also grappling with the subjects of mergers and alliances. It's a complicated issue for member-based organizations, but one that is becoming a necessary consideration in an evolving economic and political reality that directly impacts how many of these groups are funded.

"Our governments are changing how they provide funding in many different areas, including for farm organizations that have long received grants and other program support," says Rob Hannam, President of Synthesis Agri-Food Network. "Our Canadian producer base is also shrinking, so there are fewer farmers for these organizations to serve. This means that new, more sustainable solutions must be found."

For organizations in this situation, Hannam recommends an evaluative process to help find solutions. It is important to look at the value of the services an organization provides and who its stakeholders are. This could include a market assessment of services or a survey of stakeholders to determine their needs and the value of the services being offered.  

"Forming a value proposition is an important part of this process," says Hannam. "What is the value you are providing to your members or clients? Would customers pay for the services you're providing?"  

Agricultural organizations are dealing with this issue in a variety of ways. For some, it involves finding like-minded partners with which organizational alliances can be formed to streamline efficiencies and reduce overlap.  

Canada's provincial pork organizations consolidated their domestic marketing efforts into a single national approach called Pork Marketing Canada several years ago. The Ontario Livestock Alliance brought three small farm organizations into a collaborative partnership to help them expand the resources available to their producers and offer services they previously weren't in a position to provide individually.  

For others, the answer lies in forming new, consolidated organizations. At the national level, a proposed merger of three beef-focused organizations - Canadian Beef Cattle Research, Market Development and Promotion Agency, Beef Information Centre and Canada Beef Export Federation - has been making headlines as its members struggle with how to best move forward with creating a new single entity.  

In Ontario, the Grain Farmers of Ontario organization was created in 2009 through an amalgamation of Ontario Soybean Growers, Ontario Wheat Producers Marketing Board and the Ontario Corn Producers. Similarly, the Rural Ontario Institute was formed in 2010 through the amalgamation of The Ontario Rural Council and The Centre for Rural Leadership.

"Ensuring viability and sustainability is a challenge for a lot of organizations right now," says Hannam, "but this can also present opportunities to evolve and progress in new directions for the future."

Insights 

Know your future clients - carefully consider who your clients and stakeholders really are. What are their expectations of the role of the organization? What do these groups need today? What will be needed in five years or ten years?

Understand the value - it's important to determine what the value of services and the cost to deliver those services in real dollars. Would clients and stakeholders be willing to pay for these services? Would there be a gap if they were no longer being offered?  

Mergers must mean more than cost efficiency - it is important to consider mergers and alliances to help an organization towards sustainable funding. However, merging for cost efficiencies and office cost savings is good, but not good enough. A successful merger or operational alliance should consider new ways the organization can be more effective or have a stronger voice. Does one plus one equal three? It's also important to remember that sometimes merging is not the best solution. Benefits can be gained from project collaborations, joint initiatives, co-location and other forms of partnership that do not necessarily involve amalgamation.