Uniting for utilities

Features Posted 29/04/19
In this 16-page special report South East Farmer focuses on the agricultural buying group supplying members across Kent, Sussex, Surrey, Hampshire and the Isle of Wight with big discounts and community support.

In 1962, a handful of like-minded farmers met around a kitchen table and agreed to increase their buying power. Two cooperative groups, Rother Valley Farmers and Sussex Farmers, were born.

Seeing an opportunity to further increase their purchasing capacity, in 2000 these groups merged to form Southern Farmers. Over the last two decades, the agricultural buying group has grown impressively and today there are some 1,200 members located throughout Kent, Sussex, Surrey, Hampshire and the Isle of Wight.

“It all began as a cooperative of farmers clubbing together to grow their market muscle and make their voices heard in circumstances where they otherwise wouldn’t be,” said Steve Jemmett-Page, chairman of Southern Farmers. “While the membership may have grown, Southern Farmers remains as close to its roots as possible. We are not just another company; we work only for our members and have a team of people just chomping at the bit to help them save time and money.”

A not-for-profit organisation, Southern Farmers does not hold any of its own stock, working instead with over 460 local and national companies who provide its members with access to everything from fuels to electricity, fencing supplies, ready-mix concrete, animal feeds and medicines, chemicals and fertiliser. The list is endless, and groceries are probably the only thing the group doesn’t supply.

“The biggest thing that surprises new members is the vast array of products which they can purchase through the group because a lot of people don’t realise the breadth of what we offer; they just think that cooperatives are about buying fuel and animal feeds,” said Steve.

Fingers on the pulse

Adding to this diverse range of products, over the last 12 months the group has been working tirelessly on providing a new offering for its members in the form of a bespoke water supply package.

“We have our fingers firmly on the pulse all the time because we need to know everything that is going on in farming and any issues which our members might be facing,” said Brigitte Fifield, managing director at Southern Farmers. “When the government deregulated the water industry in 2017, farmers’ existing water accounts were sold over night to other companies and our members found that the new companies were suddenly trying to bill them six months in advance.”

As well as causing cash flow chaos for many, these new water suppliers lacked understanding of how drastically some agricultural operations’ water requirements can vary from season to season. What one fruit farmer might use in six months over the summer is not going to be the same in the winter, and equally will not follow the same pattern as someone in the dairy sector.

“To tackle this problem, Southern Farmers teamed up with Everflow and started working on a water account to suit our members’ needs,” said Brigitte. “It has been very challenging and quite intricate to organise, but now it is up and running members are transferring over every day.”

Water supplied by Everflow is now billed monthly in advance and, as well as the company guaranteeing to read the meter twice a year, members have the option to update their reading as little or as often as they want.

While the deregulation of the water sector was designed to increase competition in the market, water suppliers were forced to choose whether to focus on commercial or domestic users, which caused further headaches for those in the farming industry who more often than not fall into both camps.

“Many of our members are dependent upon their water supply and it is not unusual to find members with 100,000 cubic meters going through the meter per year,” said Steve. “They were really hit by these changes which made very little sense. We also started to find that a lot of members’ main water meters also supplied subsidiary meters attached to old farm cottages. The water companies couldn’t get their heads around this and decided to bill the farm for the whole amount, stating that it was up to the farmer to collect the outstanding costs from the domestic properties, even though in the majority of instances they were no longer linked to the farm. It caused absolute chaos.”

Perseverance in ironing out the many wrinkles and complications has certainly paid off for Brigitte and her team and today Southern Farmers is proud to be able to call itself a market leader in the cooperative water sector, with other buying groups from across the country now also signing up to work with Everflow under similar terms.

“It has taken almost a year to get the account up and running,” said Brigitte. “Many other cooperatives had started looking into this but had stopped because it was so complex and needed such an awful lot of work. Thankfully, now it is complete the process is very easy.”

Members of Southern Farmers looking to switch water suppliers can simply phone the office, provide a letter of authority and the SPID number from their water meter. From this, Everflow will collect details from the National Grid and will send a quote back for the member.

“There isn’t one set price for water because geographically our membership is quite spread out and different farms will be connected to different bore supplies,” said Brigitte. “If the member is happy with the unit price per cubic metre and the standing charge then they can let us know. A final meter reading will need to be taken on the day of swap over. We can also put them in touch with a water expert if there are any questions which we can’t answer.”

Easy electricity

Doing everything they can to help members focus on farming is one of the core driving principles of Southern Farmers and making sure the group always has access to the best utilities prices is a large part of that.

When it comes to electricity, the cooperative currently works in partnership with six other buying groups across the country. Alongside combining electricity to strengthen buying power, the groups also have access to a highly skilled negotiator.

“We share one negotiator who has their finger on the button and knows the market inside and out,” said Brigitte. “It would be impossible for us, as an individual group, to train someone to negotiate to that level, but by working with the other groups this becomes feasible. We also have regular conference calls with a company in Norway who monitor electricity costs and keep us updated on the markets.”

Not only can members avoid having to spend valuable farming time trawling through comparison websites or getting multiple quotes, Southern Farmers also looks after the account administration, which can sometimes be a tricky affair.

“We put a lot of effort into managing the utilities accounts because electricity is a very convoluted market and suppliers have a habit of rebilling and causing problems with paperwork,” said Steve Jemmett-Page. “If there was a problem with my own personal account, I would probably take the view that life is too short to deal with it, but being a member of Southern Farmers, I know there is someone dedicated to checking everything properly. It does take a lot of organisation.”

Fixed fuel options

Buying groups are well-known for their ability to provide members with attractive fuel prices and Southern Farmers is no different. In fact, having sold in excess of 16 million litres of red diesel, heating oil and DERV last year, fuel is the group’s biggest throughput.

“There are lots of different ways our members can choose to buy their fuel,” said Brigitte. “They can either have fuel cards, which is most convenient if they have lorries and vans on the road, or we do a spot price daily so members can phone the office to place an order and we will organise for it to be delivered to them.”

Twice a year, Southern Farmers also offers members the chance to take part in bulk buys for kerosene and gas oil. There is also the option to sign up to fixed fuel prices with contracts tailored to suit the members, a service which has proved incredibly useful for agricultural contractors who have already quoted fixed prices for seasonal work.

“Locking in fuel prices is for budgeting purposes, not speculating on what the market might do,” said Steve. “If someone has to produce or provide a service to a fixed price, having this option does give them a real advantage and is a certain way of managing finances.”

Click here to read more our full feature on Southern Farmers


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