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Farmer co-operatives breath new life into Norway’s dairy industry
By Neil Lyon

Norwegian Red dairy cows in the milking parlour, feeding bays and rest areas of the co-operative barn at Badalen Samdrift.

NEIGHBOURING dairy farmers in Norway are pooling their resources to build mega-barns for jointly housing their cows under the one roof while retaining independent ownership of their farmland where the fodder is produced.

By combining their herds and quotas, such co-operative arrangements achieve economies of scale that allow participating producers to reduce capital outlays, lift production efficiencies and reap lifestyle advantages.

The Norwegian Government has encouraged the formation of co-operatives through extra incentives in the farm subsidy program.

In a country of 15,000 dairies where cows are housed year-round, 1500 are now joint operations, making up 10 per cent of the herds but producing 20pc of the country's milk.

Small by Australian standards, the average herd size of joint operations in Norway is 37 cows compared to an average individual herd size of 17.5 cows across the dairy industry as a whole.

Near Kristiansund on the west coast, the Badalen Samdrift co-operative was formed by six dairy farmers who joined forces to build a A$2.9 million barn that began operations in May 2005.

Larger than most, the venture milks 125 cows producing 25 litres/cow/day.

Producers currently receive a farm-gate price of around A$0.66/litre for the milk.

One of the co-operative's partners, Magna Torvund Bergem, said the six member-farmers shared the expenses, workload and profits according to the size of the quota they brought into the business.

"My husband and I brought in approximately 20 per cent of the total quota, so we bring in feed for 20pc of the days in the year, we put in 20pc of the work and we take out 20pc of the profit," she said.

"As there are two farmers on duty at any one time, my husband and I work here not only 20pc, but 40pc of the time."

Mrs Bergem said forming the co-operative meant some of the farmers who would otherwise have had to close their operations were able to remain in business.

"If the six farmers in Badalen had not joined forces and set up this joint venture my guess is that three or four of the quotas would have been sold and the farms closed down within three to five years," she said.

Norwegian dairy farmer, Magna Torvund Bergem, looks over the co-operative barn complex that houses six dairy farmers' herds.

"On four of the six farms the barns needed extensive upgrading and it is not economic for farmers with small quotas to build new barns."

Mrs Bergem said part of the incentive for forming the co-operative was to free the farmers from the seven-days-a-week routine of running a family dairy and to make dairying a more attractive career choice for young people.

"Some of the farmers have jobs outside the farm which made it difficult to be tied to barn work morning and evening," she said.

"The next generation is also reluctant to take over dairy farms that have very limited free time in the evenings, weekends and holidays."

Mrs Bergem said Norway's burgeoning oil and gas industry had driven up wages to unprecedented levels, making it difficult for agricultural industries to compete for labour.

"My oldest stepson (in the oil industry) earns five times as much as what I make, so it's no surprise he doesn't want to become a farmer," she said.