Unlike compulsory systems around the world where organizations or governments are able to mandate participation and obtain government financing, FNA built a dynamic business alliance that farmers employ voluntarily. This fundamental farmer-choice impelling a private business to focus on Member profitability drives FNA to ever higher levels of achievement and distinguishes it as a unique business model.
It is FNA, focused on building the farm business alliance which makes literally all the other successes possible. It is critical that Members understand that building the business alliance is a core purpose in and of itself.
When we become a Member, and later renew our membership, we are not buying crop protection productions, nor purchasing oil, nor getting a discount at EMCO or a fantastic reduced premium on our farm insurance. In fact FNA does not sell any of those things – or anything other than the Membership. So when we become a Member, we are not buying products. We are building the farm business alliance.
That is the decision we have each made that makes possible continuing and future gains in profitability.
It is easy to say things like:
• the power of partnership
• many farmers can achieve together what none can achieve alone
• power in numbers turns into market power
It is easy to say those things. It is sometimes not so easy for us to genuinely appreciate the practical meaning and the powerful purpose that exists by simply participating in FNA.
The history of big breakthroughs, in things likes glyphosate or ivermectin or grassy weed herbicides; these things are merely examples of what we achieve in building the business alliance, how we can multiply our MarketPower to achieve real change from suppliers. None of them by themselves are the reason to participate in FNA.
Encouraging new businesses to create competition for our input dollars or leveraging our volume for stronger rebates such as with NAPA Auto Parts, or to give us an equity stake in the supply chain like ProjectN, these are not by themselves the purpose of membership in FNA.
All of those things are the products of our joint effort. We become members of FNA to build the farm business alliance and in building the alliance we create the basis for more and more opportunities to maximize farm profitability. By building the farm business alliance we are also creating the necessary pre-conditions to maximize profitability on the outputs side – the marketing and trading of our farm products.
FNA is the key farm business strategy for each of us in confronting and managing input costs going forward, and developing information, marketing and management tools to lift the returns on the land, labour, capital and management we invest in agriculture.
So FNA’s role is primarily about building and managing relationships at the farm level, negotiating advantageous terms with suppliers to provide products and services to our farms, developing the foundations for new profitability opportunities, and providing independent information that contributes to maximizing each of our individual profitability.
FNA does not manufacture, sell, store or otherwise handle any products other than Memberships and information. Instead FNA negotiates the availability of products through many different suppliers. When possible and not prohibitively expensive, FNA may also coordinate access to suppliers for Members so that Members do not have to go through multiple contacts to multiple suppliers to access a given list of products. For example you can access most suppliers through the online Member Value Portal on the web site either by Supplier name or Product category.
FNA acts as a management partner for each Member’s farm operation, always available for use as much or as little as he or she wishes.
On the input side of the equation, it is FNA’s role to help Members buy well, and to buy profitably. This is primarily achieved by negotiating access for Members to bottom-line benefits in all key input areas from crop protection to veterinary supplies
This includes working with many existing suppliers, and encouraging entirely new opportunities, more options, greater convenience and, in many input categories, much more competitive pricing — that is, lower costs and maximum profit.
FNA’s work with farm input suppliers has resulted in a continually available and growing “product inventory,” numbering in the thousands for its Members who work more than 20 million acres of land of every farm type. And this product inventory continues to grow rapidly from many different suppliers.
This work has brought farmers hundreds of millions of dollars in additional profit they would not otherwise have realized.
On the outputs side, FNA’s role is to develop strategies and active projects to increase the price Members receive on their production and to ensure they retain a higher proportion of the value of their products. Or, to sell well and sell profitably.
Throughout the value chain, FNA works with suppliers to find efficiencies in logistics, administration, marketing and other variables that also impact farm profitability. This efficiencies can include reducing or eliminating costly steps in the general retail system. For example, by creating critical masses of Members ordering from the suppliers in the same geography, we reduce the suppliers’ logistics cost which translates into a better price for us on the farm. By receiving direct-to-farm delivery we not only enjoy the convenience and time-saving of not having to haul our inputs from retailers on our own trucks, but also eliminate the suppliers’ need for intermediate warehousing and the multiple handling and transport steps involved in the general system. Therefore we create efficiencies in the entire system as individual farmers acting in a business alliance and we gain real advantages for our effort.
A more research oriented but important example has been the work FNA has done to understand the grain handling, marketing and transportation system so efficiencies can be identified.
Finally, and increasingly importantly, FNA is working diligently to negotiate arrangements and create systems to ensure Members have access to the best information to operate our farms with technical expertise and best business practices. As well, we want FNA to provide us with market information and competitor intelligence to increase our market power and allow us to easily make quicker and better decisions