Contract farming: moving us forward Demetri Chriss • CEO Tuvunu S.A. • Director, Business Development Macedonian Thrace Brewery S.A.
We were contract farming long before contract farming became “cool”… W hen we launched Greece’s first contract farming program for malting barley back in 2006, people thought we were crazy…
Then we headed for the hills… Since we didn’t have enough to worry about, we started the world’s first contract farming program for Sideritis (Greek Mountain Tea) in 2011… before we had even decided that we were going to call tuvunu … tuvunu !
So what’s the result of our ongoing “obsession” with contract farming? • Today, our two companies’ contract farming programs alone serve as the primary source of income for more than 750 families throughout northern and central Greece (primarily in Macedonia and Thrace) every year. • Our contract farming programs distribute over @ 2.5M EUR to rural families and their communities in Greece every year. A majority of these families are located in Thrace, which has one of the lowest per capita incomes in the EU. • No subsidies or handouts here – just honest pay for honest work.
And lest we forget, contract farming has also brought us this: Our state-of-the – art Malting Plant in Komotini . Completed in 2014, it’s Europe’s most modern facility of it’s kind, with a total build cost in excess of 4.5M EUR Aside from covering our own needs in malting barley for “ Vergina ” beer, we are now supplying more than a dozen small and medium size breweries in Greece, the Balkans and Turkey with world class malts from our fields in Macedonia and Thrace (@8000 acres in 2016). We are well on track to transform Greece from a net importer of malts to a net exporter. In order to reach this goal, we have already broken ground on an expansion of our malting plant to double it’s capacity at an additional cost of 1.8M EUR . This project will be completed in Q2 of 2017.
How we work with our partners in the fields: Unlike other contract farming programs, we’ve cut out the middleman. We sign our agreements directly with the growers. This provides our growers with the best possible prices for their crops – which are agreed in advance. This provides us with a greater degree of quality assurance and consistency of the crops we use in our products. Most of our growers have already been with us for a number of years, and this strengthens our bonds with their families and their communities, further enhancing our business model.
Contract farming can lead to successful synergies tuvunu K&N Efthymiadis: & One of Greece’s Macedonian premier agrotech Thrace companies, has Brewery developed and The American supplies us with Farm School our seeds, which recently joined is the foundation American our contract K&N of our contract farming program Farm Efthymiadis farming program. – cultivating School malting barley in its fields in Thermi, and also organizes Local certification Farming programs for our Communities Sideritis growers in Xanthi.
So is contract farming a guaranteed “win - win”? The Good Scenario : Contract farming is an effective business tool that can also serve as a catalyst for positive change for rural communities and Greece’s agricultural industry. The Bad Scenario : As always, the devil lies in the details – some companies are attempting to use contract farming merely as a marketing gimmick, ripping off growers with low prices for their harvest and misleading consumers in the process.
After more than a decade of contract farming, our conclusion is that it’s: Good for Business + Good for Growers = Good for Greece
Thank you!
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