Amalgrow: The Tragedy of Small Markets

Last week, the largest commercial grower in Jersey entered a consultation period with its workforce. Amalgrow, a business at the heart of our growing community, seemingly just can’t make the economics of a small population work.

This follows news of the eventual demise of the Guernsey Growers’ Association at the end of 2014.

It’s tragic how modern business often needs scale to survive; 100,000 people just isn’t a large market anymore.

Anxious to offer help, I spoke to their Operations Director, Steve Barker. “Colin, I have to send five or six guys out to a field to pick and trim cauliflowers. They may only be there half an hour to pick enough for the next day’s orders, then they come back again. They could be travelling for more time than they’re picking.”

It’s a problem I’ve heard before. The proportion of labour cost in their selling price simply does not allow enough profit margin to be retained and contain retail pricing within sensible limits. Despite the fact that our community does support local produce, and are in the main willing to pay a small premium for it, the retail price would be unpalatable for the Amalgrow business model to be sustainable. I don’t believe the market would stand a 50% premium over imported – and yes, retailers would be forced to offer that imported choice, impacting on demand. A real Catch 22.

In one savage blow, the closure of Amalgrow has the potential to both change our countryside and hammer another nail in the coffin of our agricultural heritage.

Growers keep our fields green for future generations, manage the beautiful views we enjoy, and remind us of what our Island used to be.

I for one will not stand by and watch this play out without at least trying to do something about it.

With the situation as it stands, what would be the best-case scenario? There’s a chance that the land currently used to provide a broad range of vegetables and salads to the local market could find itself used for the production of Jersey Royals for export. This would add significant supply into the market and would be likely to lower the price achieved. A premium product can lose its market premium through oversupply. The soil would suffer too; it needs crop rotation to revive its nutrient levels.

A Co-operative Solution?

We know that the biggest barriers to growing come after the crop is harvested. Selling your produce is a complex and costly business. Invoicing systems, packaging lines and distribution are massively expensive to deal with if you are only planting a couple of fields. If you are to build a sustainable business, then you have to make those parts of it that don’t add value to the consumer as efficient as possible.

With States’ support, I believe our Island could create a grower co-operative to remove these barriers. In this model, growers would all own a share in their co-operative, and pay to use it in direct proportion to the value of goods they process. Simple and fair. Just how co-operatives should be.

Genuine Jersey is perfectly placed to step in and support the running of such a service. After all, promoting and selling Jersey Produce is central to their purpose.

As a happy coincidence, this would also make life easier for retailers. It could dramatically reduce the amount of deliveries to stores over time and as a consequence fewer delivery notes, invoices and payments would be handled. This would offer the opportunity for these savings on process to be reinvested in the retail prices, stimulating demand further. But we must act quickly.

If a co-operatively owned central support service was created to deal with the business side of growing, then we might just be able to save this situation. You never know, we might even encourage a renaissance.

What will we do?

As the largest supporter of local in our Islands, we have always seen the bigger picture. I will commit to offer all the support and encouragement we can in recreating a viable model.

What can you do to help?

First and foremost, buy local. Whenever you can. Wherever you can. It might cost a tiny bit more. The cost to our Island of not supporting local is much higher though.

Regrettably there are a large number of stores that do not support the local growing community. If your favourite store doesn’t stock local produce – tell them. Then tell them again. Until they do. Then buy it.

It really is that important.

CM

_
You may find these related thoughts interesting too:

THE END OF AN ERA: THE DEMISE OF THE GUERNSEY GROWERS ASSOCIATION
GHOST_URL/the-end-of-an-era/

OUR POLICY ON LOCAL SOURCING
GHOST_URL/qr4/