Angus Cereals hopes grain facility will prove fruitful

Cereal growers in the Perth, Angus and Kincardine areas are being given the opportunity to cast aside their worries about storage, rejections, lorry uplifts and marketing while at the same time benefiting from a much higher price for their grain.

The downside is they will be required to make a cash commitment to Angus Cereals, which is proposing to build a new state-of-the-art grain handling facility in the Montrose harbour area.

The project - costing in total about 8.1 million, with a holding capacity of some 45,000 tonnes - has already attracted a Scottish Government marketing grant of 2.26m and already has 40 growers prepared to pay 115 per tonne for every tonne they will commit to the co-operative.

"We are almost there, but it is now make your mind up time," claimed Angus Cereals chairman, Jim Cargill.

He said another 50 growers had expressed an interest when the idea of a large co-operative close to dock facilities was first floated and added that he now wanted them to decide - and also encouraged those who have made an early commitment to increase their share.

One farmer who has made the commitment to the project is NFU Scotland president, Jim McLaren, based at Crieff, who will send the co-operative all the grain he grows apart from some feeding grain which he keeps for his own livestock.

He said he had contracted 1,000 tonnes to the co-operative, whose marketing will be done through Openfields, the largest farmer-owned marketing group in the UK.

Speaking in Dundee yesterday, McLaren said he was looking forward to the new co-operative getting under way next harvest. He claimed it would save him hiring labour to carry out grain drying and save investment in a new dryer, that the grain would go off the farm and not interfere with other enterprises, and the set-up would bring professionalism to the marketing.

Beyond that, his 1,000 tonne commitment was like a shareholding in the company and was transferable if needs be.

Speaking generally he said "We need to take the inefficiencies out of the system and I would appeal to other growers to look at this facility as an answer to issues such as waiting for lorries to lift grain and worrying about the need for on-farm investment."

He also said that the new business would also almost eliminate a long-standing bugbear: getting loads of grain returned to the farm. This was because the new store would be able to take in all qualities of grain.Bruce Fergusson, Scottish regional manager from Openfields, described the proposed site - in the dock area with access to shipping - as providing an opportunity to get a real premium from grain grown in Central Scotland as up until now growers had often faced a double haulage bill.

He also believed there was real potential to increase export sales of malting barley as the main dock storage facility would overcome current problems where there is great variability in grain quality coming from many different sources.

Fergusson said the Scottish malting barley market has traditionally been focussed on low nitrogen grain, which suits the maltsters, but he said there was also demand - and a premium - for high nitrogen barley for brewing and Scotland was not yet getting into this market.

On all grains he believed the co-operative could deliver a worthwhile premium which would quickly eliminate the initial cost of joining.

Growers have until 14 October to make their commitment to the co-operative. The initial charge is 5 per tonne, then there is a payment of 25 per tonne to be paid in early November and another 25 per tonne on 1 February. The balance and administration costs will be paid off over the next seven years at a rate of 12 per tonne.