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Thursday, 27 June 2013 00:00

ceiA3 scientists advise agrifood SMEs on competitiveness

The ceiA3 science team advising companies The ceiA3 science team advising companies

They help small family businesses to become competitive cooperative partnerships, to train the managers that will lead them, and to sell their products in the international market.

"We are at a critical moment in the economy where we need to bet on competitiveness," says the researcher from the Management and Organization for Competitiveness group, María Jesús Hernández Ortiz. Through this workgroup from the University of Jaén, the Agrifood Campus of International Excellence (ceiA3) has spent several years analyzing the business and production of Andalusia with relation to the food industry. The overall findings of the team are that the small businesses that make up this network must join together to share the costs of production and eliminate competition, maximizing the professionalization of most of their activity, and focusing on the internationalization of their products.

"Farms are becoming smaller and less profitable, so we have to transmit this idea of coming together to the various owners," explains the head of the group. With regard to the olive sector, Andalusia is characterized by a large number of small family businesses, with few acres of cultivation, whose earnings barely cover their production costs. "There are fixed costs for maintaining crop areas. A tractor can fetilize one thousand or ten thousand olive trees, the more trees, the more profitable the tractor. This is the principle we try to apply", says researcher Elia Garcia, a ceiA3 group member.

These experts also point out that the best formula of association for these family owned lands are limited liability companies or cooperative partnerships. In Andalusia, there are many agricultural co-ops formed by agricultural entrepreneurs, especially in the olive oil sector, pursuing precisely the goal of sharing expenses. But in practice, many of them are still too small to cope with the large distribution companies. "These co-ops also have to join together to avoid competition between them and become an entrepreneurially competitive agent," explains Maria Jesus Hernandez.

Professionalization and Internalization

Myriam Cano, a member of the research group linked to ceiA3, explains that another guideline to be followed by agricultural companies in order to gain competitiveness is professionalization. While family firms have positive values such as know-how, tradition, or sacrifice, they also have the problem that many times the person who is in charge of the company or must make important decisions is not the most adequate, or does not have the necessary training.

This problem also occurs in cooperative societies; the Management and Organization for Competitiveness group has predefined what would be the ideal profile for their positions. "The perfect executive to lead these societies would be a person trained in business and market matters, someone with good knowledge of the resources and tools on which they can rely, who is familiar with the principles of cooperative culture and feels an interest in doing good to the community," said the group's director.

Another line of action of the UJA team is a focus on internationalization, especially in studying the challenges facing olive companies that wish to export part of their production, as well as the advantages and disadvantages of doing so. "Spain is the largest producer of olive oil in the world and yet is Italy is the leading exporter," says Myriam Cano.

Along these lines, the UJA group organizes training sessions, workshops, seminars and other meetings in the sector, with the aim of raising awareness among small businesses about the need to unite, to train and professionalize the sector, in order to become more competitive and to teach companies to internationalize production. "These small companies have no choice but to transform or die" concludes Maria Jesus Hernandez.

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