Machinery rings, Germany's innovative way of maximizing time and equipment

Wednesday, October 6, 2010

By formalizing farming's traditional neighbourly help into computerized listings of available labour, machinery and special skills, German farmers are providing a service and turning a profit into the bargain

by NORMAN DUNN

Just this year, the German farm machinery ring association received the respected international "Top 100 Innovator" accolade from the Vienna University of Economics. It's one of many awards that have come the way of this concept, developed since the 1980s when the first few dozen farmers got together to help each other out by swapping spare machinery and labour.

Nowadays, in Germany alone, 193,500 farms and 260 tractor and implement centres are involved. But, from Spain to Scandinavia, the formalization of farming's traditional neighbourly help into computerized listings of available labour, machinery, special skills and services is booming. Building on the solid foundation of providing income and work from spare machinery and time, the movement has now led to jobs outside agriculture when there's not much doing on the farm. In Germany, for instance, the international airport in Munich has a fleet of machinery ring members with their farm tractors fitted with snow clearance equipment, on call to keep the runways free.

There's a lot more snow 600 miles northwards and that's why, this past winter, Central Holstein Machinery Ring had its farmer members, their tractors and snow plows working a total of 40,000 hours keeping roads clear and earning the equivalent of C$15 million. The rings have ensured that snowy weather is very profitable for farmers who used to spend their winters sitting in the kitchen waiting for the weather to clear. And what do they get for using their tractors and blades out on the roads? Depending on the size of tractor, from $21 to $25 an hour.

This particular Central Holstein machinery ring mirrors the innovative success of the movement throughout Europe. In 1988, it had just 79 farmer members. Twenty-two years later, 11,000 farmers are affiliated. On top of machinery and labour exchanges, this ring offers machinery leasing at preferred rates and its members can take advantage of bulk buying services for fertilizer and diesel. There's 30 per cent off the price of new cars for members. If a farmer or his wife is sick, or just wants to take a few weeks off, there's a relief service with 36 staff skilled in milking, tractor driving and other tasks. Last year, this sector alone registered 2,600 relief operations.

There's also a whole raft of advisory services available, including legal advice, independent advisors covering insurance and banking questions, advice for farmers on renewable energy production. In Central Holstein, this is mainly the production of "green" electricity from energy-crop biogas generators. 

"We also have our own fleet of 25 trucks and drivers available to members," confides machine ring service manager Peter Struve. What does all this cost a farmer? "Well, annual membership fee for our ring – and most others in this country have similar price structures – is (C$100)", says Struve.

On top of this, farmers have to pay the equivalent of $1 per acre each year. An interesting aspect of the machinery ring pricing discipline is that only guide prices are given for what members should charge each other for loaning machinery and labour. A 100-h.p. four-wheel drive tractor could cost around $43 per hour plus maybe another $12 for the driver; a big telescopic loader with driver $40 an hour.

The continual push for new ideas has also developed a national farm machinery ring management reckoned by the Vienna University of Economics to be among the best in Europe for innovative thinking. There's a staff of 80 experts running the association countrywide and the management structure is designed to include an annual analysis of the potential for each team member. On top of this, the machinery ring staff is continually assessed to find the tasks for which each person is best suited.

But back to Central Holstein, where another aspect is making the machinery ring one of the most popular in rural Germany. Ring member Martin Bucholz is farm manager of a 2,700-acre arable unit producing energy crop silage for biogas. "Some of our fields are a fair distance away from the biogas plant and this means we are travelling through villages with 250-h.p. tractors and 20-tonne loads of chopped corn at silage time. Right from the start, machinery ring members have developed a concept of consideration for the non-agricultural residents in the surrounding countryside," explains Bucholz.

"We tell our drivers to slow down on public roads and especially through villages. We also have a policy of stopping silage-making operations at around 8 p.m. instead of thundering on through the night – a procedure that was normal not so many years ago."

This machinery ring member says his organization's goal is to win more understanding from the rest of the population. "The influence of the machinery rings makes sure everyone takes part. I think it's paying off, especially as we're able to explain we are now producing environmentally-friendly energy for everyone." BF

Norman Dunn writes about European agriculture from Germany.