HARVESTER GROUP CONSOLIDATION: A CASE STUDY ON ISSUES AND EFFICIENCIES

IN 1995, Central Tweed Harvesting initiated a consolidation program in an attempt to control harvesting costs. This paper discusses the issues faced, the efficiencies gained and the current and future challenges. The group originated from the amalgamation of four existing operations harvesting 150 000 tonnes. It now consists of 25 farms harvesting 176 000 tonnes or 26% of the local mill capacity. In order to achieve the current status the group faced several key challenges and addressed each of them with an innovative solution. Historically, larger groups were operated as cooperatives but Central Tweed opted for a corporate structure of a Pty Ltd company with each member directly owning shares proportionally linked to their holding's area. Operating under the Corporations Act with its well-established and understood commercial rules and processes has greatly assisted the group in attracting and maintaining its membership. The corporate structure has minimised the occurrence of disruptive social, political, tribal and equity issues that are prevalent among any group of farming individuals. The day-to-day and longer-term operational issues have been addressed by the egalitarian and democratic processes afforded by the structure while still attending to the specific needs of each individual member. The success of the structure is demonstrated by the fact that only one member has exited in the history of the group. The group has been successful in not only containing the costs of harvesting, it has reduced the unit cost by approximately 26% in real terms calculated against the historical CPI. The group operates a fleet of modern equipment with a staff of seven on a 2-shift roster harvesting g an average of 62 tonnes per hour. Efficiencies have been gained through the scheduling of harvesting based on pad location rather than the traditional farm-by-farm system. This allows the harvesting crew the flexibility to better manage the existing variations in crop density and haul route length. The use of GPS and direct communications with the mill weighbridge have also provided in-paddock efficiencies and reduced downtime related to turnaround scheduling. Given the group's success in reducing harvesting costs while increasing the average yield per hectare of its members, further expansion is envisaged both horizontally by the expansion of membership and vertically with addition of supplementary operations.