40 CADERNOS DE ANÁLISE E PROSPETIVA CULTIVAR N.º 32 DEZEMBRO 2024 – Cooperativas federated cooperative into a primary cooperative, and subsequently merged into the largest producer of compound feed in the Netherlands, named Agrifirm. 7. Food chain strategies Traditionally, the activities of agricultural cooperatives focussed on the first handling of farm products (or directly selling inputs to farms). From a supply chain perspective the positioning of the cooperative was upstream, which means ‘close’ to the farm. However, this focus on upstream supply chain activities changed in the 1990s when marketing cooperatives started to engage in downstream activities such as product innovation and the development of consumer brands. Cooperatives traditionally followed a cost leadership strategy, continuously aiming to improve the efficiency of processing and sales operations. Members have always urged their cooperatives to keep operational cost as low as possible. Cost leadership was also determined by the market structure: cooperatives were price takers in competitive markets, or prices were determined by EU market policies. This cost leadership strategy has induced many mergers among cooperatives when technological developments raised the minimum efficient scale of operation to a level beyond the size of one cooperative. The mergers have led to the small number of cooperatives that have survived. Besides cost leadership, marketing cooperatives have developed two other strategies to increase member income. First, they developed different food and non-food products using the ingredients of the farm product. Dairy, starch potato and sugar cooperatives have all invested heavily in the development of new consumer and industrial products. For instance, the dairy cooperative FrieslandCampina is one the world’s largest supplier of lactose to the pharmaceutical industry. Second, cooperatives in the dairy and sugar industry have developed their own consumer brands, in order to strengthen their competitive position, particularly in relation to large food retailers. In fresh produce, developing consumer brands is more difficult as products are usually sold under private label of supermarkets. 8. The future of agricultural cooperatives in The Netherlands Agricultural cooperatives in The Netherlands have shown to be resilient. They have a long history, going back to the mid 19th century. After a period of slowly gaining legitimacy, the cooperative became the favourite model for farmer collective action, both in purchasing farm inputs and in selling farm products. In the 20th century, Dutch agricultural cooperatives have benefitted from national market ordering (in the crisis, war, and postwar years) and later from the Common Agricultural Policies of the EU. In response to the major transformation in EU agricultural policy in the 1990s, Dutch cooperatives adjusted their business strategies and continued to be successful in providing their members with economic benefits. In recent years, agricultural cooperatives are facing new challenges but also new opportunities. The main challenges relate to the negative environmental impact of farming activities. As The Netherlands combines high productivity in farming with a high population density (and thus high pressure on land), the negative environmental impact, for instance emissions of CO2, nitrate, and methane in animal production, are met with great scrutiny by Dutch society. While individual farmers are pressed to apply more sustainable farming practices (using fewer pesticides, better protection of biodiversity, more animal welfare, and using less imported feed ingredients), it is the task of the cooperative to coordinate these practices among its members. Cooperatives have developed detailed evaluation and remuneration schemes that facilitate and incentivize farmers to apply various types and different levels of sustainable farming practices. Farmer-owned cooperatives play a major role in this dynamic process of transforming the current agricultural system into a more sustainable food system, not only because of their large share of the market, but even more because they are the intermediary between individual farmers and societal stakeholders. Opportunities for cooperatives lie in the further differentiation of the consumer market. Consumers increasingly prefer regional specialty foods, which are often supplied by a small group of regional producers united in a new cooperative. Dozens of new agricultural cooperatives have appeared over the last two decades, seizing the opportunity of the growing consumer demand for products that are of high quality, sourced from nearby, and produced in a fair and environmentally sustainable way. Cooperatives have also benefitted from the societal re-valuation of notfor-profit enterprises. An increasingly large group of consumers and citizens prefers to buy good and services from social enterprises, purpose-oriented companies, and member-owned firms. While Dutch agricultural cooperatives have become large enterprises themselves, they still acknowledge the benefit of cooperation among cooperatives. A new example of such cooperation is the data cooperative JoinData. Established by large agricultural cooperatives, the main task of JoinData is to facilitate the fair sharing of farm data. While the collection, analysis, and recombination of agricultural data
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