Interview by Prof Tim Massarol, Centre for Entrepreneurial Management and Innovation (CEMI) – first published in Australia’s Leading Co-operative and Mutual Enterprises in 2019. Abridged version below.
The Yenda Producers’ Co-operative Society Ltd (YPC) is one of Australia’s oldest continuously operated co-operatives and one of its largest by annual turnover.
Operating as a group, the co-operative provides a range of professional services and agricultural supplies such as fertilisers, chemicals, biologicals, seeds and hardware.
YPC is a fantastic example of the economic and social benefits that the co-operative and mutual enterprise business model can deliver to regional communities.
By setting up the co-op the [founders] were essentially setting up their own infrastructure and logistics. This was the same for marketing. The buyers who were there at the time were going to rip them off, so the co-op could be there to help them get their fruit to market, provide packaging and logistics for them.
History and formation
The town of Yenda is located in the Riverina district of New South Wales (NSW) within the traditional lands of the Wiradjuri Aboriginal people. The hot, dry, semi-arid climate can only sustain relatively large populations and high levels of agriculture, horticulture and viticulture due to its ability to draw water from the Murrumbidgee River system.
The town experienced major growth from 1919 when returned service personnel from WW1 were provided with government assistance to settle within the district on typically small allotments only suitable for small scale dairying and intensive horticulture. Many soldier settlers were undercapitalised, lacked the skills needed for successful farming, and faced problems such as poor soils and drainage.
Throughout the early 1920s the community of Yenda struggled to make a living, forming several co-operatives in order to assist them with the processing and marketing of tobacco, hay, grain and grapes.
However, by 1924 the two most successful of these businesses were the Yenda Producers Ltd, and the Yenda Settlers Ltd that agreed upon amalgamation in 1926. State government support at the time encouraged soldier settlers to join co-operatives, which may explain why the newly merged entity was registered with the Co-operation, Community Settlement & Credit Act, 1923 rather than the Companies Act.
Probably the two drivers were the community’s desire for a better deal, so the community got together to form the co-ops to self-service and on the other side of the coin, many of the existing suppliers and buyers were probably ratbags who were ripping them off. So, the co-operatives were a way of protecting themselves, with one on the supply side and the other on their product sales side.
– Nayce Dalton, Yenda Producer Co-op’s former Chair
Timeline
20s and 30s
Throughout late 1920s and into the 1930s the YPC and its members battled fires, floods, drought and the financial distress caused by the Great Depression. However, progress was made, and the co-operative expanded into the packing and export of fresh and dried fruit.
World War Two
Following the Second World War (1939-1945) and the arrival of many skilled immigrants from Europe, the prosperity of the co-operative and its members grew. Large-scale farmers were investing in fat lambs and making good profits and small scale horticultural producers were growing stone fruits, (e.g. apricots, peaches, pears, figs, quinces), citrus, vegetables (e.g. tomatoes, beans), nuts and berries as well as producing grapes and fortified wines.
60s, 70s and 80s
The co-operative’s retail operations expanded during the 1960s and further expansion took place through the 1970s and 1980s as a shift into bulk handling and mechanisation from harvesting to storage, processing and packing, increased productivity.
90s
By the end of the 1990s the co-operative operated branch stores in several towns including Leeton and Griffith. YPC acquired a locally-owned stock and station agency and began offering real estate agency, insurance broking and agency in livestock buying and selling, and providing support for water trading, livestock production, motor vehicle and general insurance.
The “Millennium Drought”
The 1996-2010 drought severely impacted the ability of the co-operative’s members to grow their crops and by 2002 rice production had fallen by 50% and was reduced to virtually nothing by 2008. Compounding this problem was the decision by the NSW government to “separate” the irrigation water from the land, essentially pooling the ownership of water rights into a water market.
The semi-arid conditions remain as the critical strategic challenge that has faced Yenda Producers throughout its history:
“Yes, this issue continuously raises its head, particularly when we go into dry periods. On the back of climate change, which I don’t think anyone is seriously arguing that the climate is not changing, with more severe dry and wet, with more unpredictability of weather now common,” said former Managing Director, Peter Calabria.
2000s
The combination of drought and low water allocation resulted in the co-operative starting a joint-venture with Riverina Water Engineering (RWE). Based in Griffith, the RWE Yenda Producers Irrigation business commenced trading in November 2004 and has grown to a turnover of more than $10 million and employs around 25 full time and casual staff offering design, installation and maintenance of irrigation systems and a retail outlet for irrigation products and emergency break-down services for customers.
2010s
In 2015, the co-operative formed another joint venture between itself and grain trader Origin Grain to help its members secure access to niche grain markets.
YPC made several acquisitions from 2016 – 2020:
- 2016 – Acquisition of Fruit & Case in Yenda
- 2018 – Acquisition of Akazien Hof, Coleambally and Breed & Hutchinson
- 2020 – Acquisition of NorMac Rural Baranduda And Wangaratta.
YPC today (Source: YPC)
YPC currently employs nearly 50 full-time staff, in addition to the staff of its subsidiaries, to provide the following products and services to its members and customers.
Agronomy advice: YPC currently employs seven tertiary qualified agronomists and six tertiary qualified horticulturists to service the co-op’s members.
Livestock Production: The Livestock Production Consultant team is committed to improving the quality, health and management of all Co-operative members’ livestock operations.
Services to members: YPC currently provides its members with cartage of produce (local and interstate), cartage and spreading of fertiliser, cow manure, and seed. Receival, co-ordinating and grading of dried prunes as agents for Angas Park.
Supply of farming inputs, including:
- Fertilisers – granular, liquid, soluble and gas (NH3)
- Chemicals – fungicides, insecticides and herbicides
- Seed – wheat, rice, corn, cotton, melons and a broad variety of vegetable seed
- Livestock Production – drenches, vaccines, and mineral supplements
- Hardware – including wire, fencing and a wide range of gardening items.
This case study was first published in Australia’s Leading Co-operative and Mutual Enterprises in 2019.