Agricultural co‑operatives could provide a major boost to UK economic growth and help shore up national food security by making farms more resilient to global shocks, according to a new policy paper from the Co‑operative Party.
The report, which is backed by influential Labour MPs including Steve Reed and Jonathan Reynolds, argues that the model of collective farming—where producers pool resources, share risk and invest together—has been under‑used in Britain. It calls for “a shift in perspective, not a doubling down of the status quo” and identifies the forthcoming 25‑year Farming Roadmap for England as a chance for the Department for Environment, Food and Rural Affairs (Defra) to formalise a commitment to expanding agricultural co‑operatives.
How co‑operatives shield farmers from market volatility
A central claim of the report is that co‑operatives can significantly reduce farmers’ exposure to volatile input markets—particularly for fertiliser, fuel and animal feed. The mechanism is straightforward: by acting together, growers can negotiate better prices, lock in supply contracts and spread the financial hit when costs spike.
The importance of this has been underlined by the conflict in the Middle East. Rising gas prices, which account for roughly 60% of fertiliser production costs, have driven up the price of nitrogen‑based fertilisers. The UK also imports urea from the Middle East and North Africa, where shipping and distribution have been disrupted by instability near the Strait of Hormuz. Meanwhile, oil prices remain high, pushing up the cost of red diesel, transport and agrochemicals. The Bank of England, responding to the energy shock, has held interest rates at 3.75%, adding to borrowing costs for farmers.
Joe Fortune, general secretary of the Co‑operative Party, said the model offered a form of “strategic resilience” in this volatile environment. “In a world where fertiliser supplies can be disrupted and energy costs can spike overnight, the ability to coordinate, adapt and invest collectively becomes a matter of national strategic importance,” he said. “Government has the opportunity to unleash growth in this sector and use it to help secure our supply chains for the future.”
Practical examples already exist. ESG Drysdale, a co‑operative vegetable production company based in the east of Scotland, brings together 20 growers. Its technical director, Matt O’Hagan, said the structure helped plan effectively and manage volatility. “The structure gives farmers a real voice in how their produce is sold and valued, building trust, stability and long‑term confidence,” he said.
Paul Gerrard, director of public affairs at the Co‑operative Group, which runs thousands of grocery stores and backs the call for change, said the co‑operative model “naturally lends itself to sharing costs and spreading risk” and makes “the day‑to‑day fundamentals of farming more efficient”.
The report also notes that co‑operatives create the conditions for shorter, more resilient supply networks and allow rural economies to retain more value. This aligns economic resilience with democratic ownership, the authors argue. There are an estimated 526 agricultural co‑operatives in the UK, generating an income of more than £9 bn. Well‑known examples include the Arla dairy group, owned by 3,200 British farmers and supplying over a quarter of the nation’s milk, and Berry Gardens Growers. Others such as Fram Farmers, the Openfield Group, Mole Valley Farmers, the Green Pea Company, the Mustard Seed Growers Co‑operative and the Blackcurrant Growers’ Association demonstrate the breadth of the sector. In 2019 about half of UK farmers were estimated to be members of a co‑operative in some form.
Despite this, the report says there is “significant room for expansion” and points out that the UK’s agricultural co‑operative sector is smaller than in comparable European countries. Labour’s 2024 manifesto included a commitment to “support diverse business models”, including by doubling the size of the co‑operative and mutuals sector. The Co‑operative Party, which has an electoral pact with Labour, is pushing for better national data on agricultural co‑operation, modernised capital rules, clearer regulatory frameworks, targeted financial support—potentially through the British Business Bank—and reform of Fair Dealing regulations to fully recognise the role of co‑operatives in supply chain fairness. Use of government procurement to expand markets is also among the policy asks.
Growing reliance on imports
The push for co‑operative expansion comes against a backdrop of rising import dependency. Across the national diet, the UK only grows 62% of what it consumes. The country imports 83% of its fruit, partly because many popular varieties such as bananas cannot be grown domestically. In 2025, imports of vegetables and fruit were worth £15 bn, up 9% on the previous year in current prices. A further concern is that the supply of fruit and vegetables from countries facing high water scarcity has increased, raising questions about long‑term sustainability.
Meat imports into the UK rose 15% year‑on‑year in 2025 to £5 bn, according to HMRC data obtained by the Co‑operative Group. Poultry was the most imported protein, worth almost £2 bn, with Poland and the Netherlands accounting for the largest share. However, imports from Thailand surged by nearly 50% to £23.3 m, representing about 1% of fresh and frozen poultry imports and indicating a growing presence in British shopping trolleys.
These trends underline the pressures on UK farmers. Beyond the volatility caused by the Middle East conflict, post‑Brexit changes have brought their own challenges: the phasing out of EU subsidies and the transition to new domestic policies such as the Environmental Land Management (ELM) scheme have created uncertainty. Labour shortages, trade barriers—sales of British farm products to the EU have dropped significantly since Brexit—and unpredictable weather linked to the climate crisis all add to the strain. Reforms to Agricultural Property Relief and potential inheritance tax on farm assets above £1 million have also caused concern.
The Co‑operative Party’s report argues that expanding the agricultural co‑operative sector offers a practical, democratic way to address these pressures. Co‑operative start‑ups, it notes, have an 82% survival rate after five years, compared with 40% for UK companies overall. Mission‑led businesses including co‑ops, mutuals and social enterprises already represent 5% of UK businesses, account for 10% of GDP and create around 4 million jobs. Agricultural co‑operatives alone contributed nearly £10 bn in revenues in 2022, part of a wider co‑operative sector that generated collective revenues of £40.9 bn that year.
