Starter Kit. Idea 282 of 500. Cluster 14
Egg and poultry co-operatives with a cold chain, so the price does not collapse in the season
The mechanism, from the book
The smallholder sells raw to a collector at the gate and the collector sells to a packer who puts his own name on it. Denmark's farmers got rich the day they owned the creamery.
The first step
Interview 10 egg producers in one district about what they were paid per egg in the best and worst months of last year, and write down the spread. Then ask a bakery, a hotel and a supermarket buyer whether they would sign a fixed price for a year if supply were guaranteed. A buyer ready to fix a price, set against the spread, shows what a shared cold store would earn the members.
- Who pays first
- A bakery or hotel buying eggs every day, which prefers a fixed price for a year to chasing the market up and down.
- What leaves today
- Farmers sell eggs at whatever the glut price is on the day, and the margin from storing and timing goes to traders.
Ask first
- Department of the Registrar of Companies. Ask which co-operative form suits egg and poultry producers selling together.
- the area Medical Officer of Health. Ask what a shared cold store for eggs and poultry needs.
Check before you spend
Whether members sign a binding contract to sell through the co-operative, and whether the cold store has food approval.
Find out these three numbers
- What did producers get per egg in the best and worst months?
- How many producers would sign a supply contract?
- What does a cold store cost to run each month?
A comparison from the book
Denmark. Chapter Eleven
"a co-operative without an enforceable contract is a committee."
Without a binding contract, members sell on the side and the co-operative fails.
The test
Does it keep value that now leaves the island, or build the proof that lets somebody else do so?
From the appendix of Why Not Sri Lanka? by Dr Maheshika Halbeisen. The idea and the mechanism are the book's; this kit was written for the site.