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From State Service to Private Business: The Dutch Case - Nico de Groot TAIEX Workshop 25.02.2016

This presentation by Nico de Groot highlights the transition of the Dutch agricultural advisory service from a government department to a private business. It discusses the history, core business, unique selling points, and international expansion of the Delphy service company.

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From State Service to Private Business: The Dutch Case - Nico de Groot TAIEX Workshop 25.02.2016

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  1. FARM ADVISORY from STATE SERVICE to PRIVATE BUSINESS THE DUTCH CASE NICO DE GROOT TAIEX Workshop 25.02.2016

  2. Introduction Nico de Groot • Graduate Wageningen University. • Working 23 years in internationalhorticulturalprojects. • Working in Ukraine since 1999. • Working at Delphy 7 years. .

  3. Introduction Nico de Groot • Ukraine Fruit 2000: 1999-2001. Vinnitsya. • Tacis project Improvement of logistic services and marketing channels for SMEs in agriculture 2005-2006. Chernivtsi, Rivne. Kharkiv. • EU project to support the start up of local fruit and berry production. Volodymyrets, Rivne. .

  4. Netherlands & Agriculture .

  5. Agriculture & Netherlands .

  6. Agriculture & Netherlands .

  7. Horticulture & Netherlands • High Productivity. • Specialized production. • Capital & Knowledge Intensive. • Logistic Hub (Auctions). • Strong in propagation materials: seed potatoes, vegetable seeds, fruit plants, cuttings (NAK). .

  8. Delphy Service Company selling Knowledge & Information on every aspect of arable& horticultural production. Help clients to solve problems. Help clients to prevent problems to arise. .

  9. Delphy Mission Statement To support clients with knowledge and information to realize their strategic goals: • High productivity. • Efficient use of inputs. • Maximum profit.

  10. Delphy Core business • Crop Advice. • Training. • Practical Research. • Develop Horticultural Investment Projects. .

  11. Delphy Unique Selling Points • Specialized knowledge on any crop. • Oriented on grower/practice. • Advisors with roots in sector/ production. • Independent. • Strong link between research/ innovation and application on farm. .

  12. Delphy Key Data • Turn over:> 20 million €. • Over 9.000 clients. • > 200 experts. • Private company/owned by management. • Farmers/growers are main clients. • Based in Netherlands, operating worldwide. • Represented in UK, Denmark, Belgium, Poland, Russia, China, Japan, Spain, , Turkey, Ethiopia, Kenya and South Africa.

  13. Delphy International Offices Russia UK Poland Japan Turkey Spain China Ethiopia Costa Rica Kenya South Africa

  14. Delphy Products • Crop Specific Advice (on spot or distance). • Crop protection plans, fertilization plans, irrigation/fertigation schemes, spraying/crop protection schedules. • Business plans/investment plans/feasibility studies. • Investment projects support.

  15. Delphy Products • Training & Instruction (e.g. pruning, storage). • Organization of study trips, field days, seminars. • (On farm) research projects. .

  16. Delphy History • Roots in 1880’s. • Crisis: government intervention: support to education, training, research and farm advisory services. • Department within Ministry of Agriculture: DLV • Policy instrument: increase of production, modernization & specialization. .

  17. Features state advisory service • Services free of charge. • Focus on group activities and demonstrations: information provision to groups of farmers. • Strong link with government paid research and applied research. • Linked to other government instruments like investment subsidies, land reclamation projects, land consolidation. .

  18. Dutch agri-knowledge structure < 1995 Fundamental research organised exchange of information funded by government Applied research Extension free service Farmers

  19. Delphy History • 70’s-80’s: change in policy: over production in EU, problems with pollution (water, pesticides), loss of bio-diversity, protests of citizens, more attention to environment, growing attention for quality-not quantity. • Economic problems: budget cuts. • Privatization process started in 1990: less government, more sector. • Shift from free advice to paid advice. .

  20. Privatization process Privatization in 3 steps: 1. From government department to independent company 100% owned by state (1993). 2. Sales of shares to management/private companies (1998-2000). 3. Management buy-out: current management bought remaining shares from state (2005). .

  21. Dutch agri-knowledge structure > 1995 Fundamental research knowledge=money no free services Applied research Extension Farmer groups / individual farmers

  22. After privatization • Introduction of paid services. • Shift to bilateral advise: face to face. • Same fields of advice but more attention for: • Farm economics. • Farm strategy and – development. • Individual targets for advisors 100-120 k€/year. • Advisors responsible for acquisition of clients.

  23. Delphy History • Since 2005 independent private advisory company. • Separation of plant & animal section. • Since 2005 internationalization: UK, Denmark, Belgium, Russia, Spain; more recently Poland, China, Japan, Kenya, South Africa. • Since January 2016: Delphy. .

  24. Delphy regional offices Assen Hillegom Dronten Hazerswoude Wageningen: head quarters Bleiswijk West Maas Horst

  25. Delphy business model starting points • Farmer = Client = King. • Knowledge is our resource • Advisor is entrepreneur: own acquisition, own clients, own target. • Delphy facilitates the work of advisor.

  26. Delphy business model • Organized in teams. • Team managed by teamleader combining management with consultancy. • Decentralized; operating from regional offices. • Team are profit centre: place where money is being earned. • Small central office with support staff (bookkeeping, HR, ICT). • Virtual organisation (all flexworkers).

  27. Delphy business model • Each advisor has personal turnover target; each team has a team target. • Each advisor has own clients/projects: 20-40 customers per advisor. • Advice on basis on annual contract (4, 10, 25 visits per year/growing season+ support by phone, e-mail, sms); tailor made to needs of client. • Incidental/occasional visits (payment per hour/day).

  28. Delphy business model • In-company training: • - technical skills • - economic skills • - business skills • Mentorship.

  29. Profile Advisor • Agri-horticultural background. • Bsc/Msc. • Critical. • Independent.

  30. Delphy Knowledge Development • Research team of 10 specialists • Practical research: topics effectiveness of new fertilizers, control of new pests & diseases, testing of machinery, comparing of varieties. • Initiated on basis of questions of growers. • Or on demand of input suppliers. • Foster innovation in plant production. • Linkage to Wageningen University.

  31. Projects • Government, MoA. • Provinces. • Waterboards. • EU (Horizon 2020). • Applied research. In cooperation with WUR, farmer organizations, farmer groups, agri-business.

  32. Lessons learnt • Privatization takes time. • Take step from free to paid services in 1 time. • Growers are willing to pay if you provide added value. • Asking money for services requires different mind set.

  33. Lessons learnt • Be careful with subsidies. • Balance between team & individual advisor. • Added value of company for advisor. • Linkage with research and education.

  34. Challenges • Knowledge recovery. • Innovation. • Internationalisation. • ICT applications/apps. • Support Desk: 24/7 service provision. • Cooperation with commercial partners/input suppliers.

  35. Trends in agriculture • Scale of production increase/decline of farmers • PC/Internet based Decision Support Systems • GEWIS: crop protection based on weather data • Fungal diseases: forecast models • MLHD in weed control: low dosage herbicide spraying tool • Precision agriculture through GPS • Spraying systems • Fertiliser applications • Robots • Harvesting apples • Sustainable production: less pesticides, attention to bio-diversity

  36. Irrigation planner: setup Providing advice about: Irrigation yes / no Moment to start irrigation Amount of water to irrigate Gives overview Situation of irrigation on the farm Ranking of fields to irrigate Per field Ready to use in arable crops and vegetables

  37. Trends in agribusiness • Population growth. • Globalisation. • Concentration of buying power in large retail chains. • Margins farmers decrease. • Demand for tracing and tracking of produce, product certification (Global Gap, Organic). • Organic farming, local-4-local. • Climate change.

  38. Market development in vegetables Market channel 1980 1990 2000 2010 Supermarket 59% 67% 78% 85% Greengrocer 28% 22% 14% 8% Market place 10% 9% 7% 5% Grower 3% 2% 1% 2%

  39. Dephy advisor in the future • Changing role: from advisor to sparring /information partner. • High education: more Msc, foreign languages. • Increased use of online tools. • More international orientation/clients.

  40. Dephy in Ukraine • Active acquisition since 2013. • On-hold due to economic crisis. • Interest to partner in (EU) projects. • Delphy Ukraine?

  41. THANK YOU for the ATTENTION Nico de Groot 0031 6 51073548 n.degroot@delphy.nl

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