https://ec.europa.eu/eip/agriculture/en/find-connect/projects/bovine-beef-innovation-network-europe
Introduction to the challenge addressed
The idea for contracts came from the awareness of the difficult relations between producers and buyers, the instability of market, the idea to share the profit or the loss, and as way to program the activities of both operators. It was planned by the farmers’ association, agreed with farmers and some slaughter operators, and presented to all operators in open meetings and already applied on few occasions.
Description of Innovation
The contracts are signed by the producer and the buyer of finished animals (slaughter operator) and establishes the period of the production of the animal to become mature defining the market standards or specific requirements of the client and the final price of selling. The association Unicarve acts as a third body to monitor the activity during the contract period and the compliance with the agreements laid down in the contract. The contract takes into account the market trend of prices of the major feeding ingredients during the period of the contract, and the market prices of animals at the end of finishing: the final price agreed can be adapted in case of important variations in the two parameters (feed and cattle prices), with the aim to share the profit or loss between the operators involved.
Impact on farm performance
The opportunities for all operators is the possibility to plan the production in time with an insurance on the success of the operation, since the positive or negative profit is equally shared. The presence of the association Unicarve as a third body of control is an aspect that gives trust to the operators.
Farmer comment
Farmers are usually sceptic about contracts, for the fact that it is a field where there are traditional long term relations of trust or mistrust between farmers and slaughter house operators. For this or other reasons both operators usually either already have agreements or prefer to be free on the market, to be ready to catch the best occasion at the moment of need.
Author: Alessandro Mazzenga - Unicarve