A WAR of words has broken out between CBH vice chairman Vern Dempster and Tammin grower and Australian Grains Champion director Brad Jones.
In a series of emails and a text message provided to Farm Weekly, Mr Jones criticised Mr Dempster's ability to serve on the Board and comments made in an email sent in September 2014 from Mr Dempster's CBH email account in which Mr Dempster said grower boards had a percentage of "lower performers".
On November 26 last year, Mr Jones emailed Mr Dempster asking to confirm this position, with Mr Dempster replying that "member elected boards, not just grower boards, often have a percentage of new board members who lack experience and company knowledge and will not perform optimally until they gain that".
The following day Mr Jones responded, criticising Mr Dempster's business acumen and his "lack of belief in board renewal and rejuvenation".
A text message sent by Mr Jones to Mr Dempster on December 23 further criticised Mr Dempster, saying that "you have already driven one co-op into the ground by politics, don't do two," referring to Mr Dempster's time on the board of the United Farmer's Co-operative (UFC) before it was sold to fertiliser company Ravensdown in January 2008.
Mr Dempster said he had been "shaken" by the emails and messages.
"It shakes you a bit, because you're not expecting that level of vitriol,"he said.
"You don't mind arguing or debating but the malice that was with it took me off guard.
"Brad seems to be doing all his efforts to ensure I don't stand or if I do he will try and undermine me as much as he can."
Mr Dempster said he did not want to be misrepresented in regards to claims that he did not believe in board rejuvenation.
"You've got to have turnover and you've got to have transition and it's worth it to have growers rather than a board full of independents," he said.
"From international co-operative research, you're still better off having a reasonable number of grower directors but work on upskilling them and that takes time before they're fully on board."
He said the claims made by Mr Jones in regards to his directorship with UFC were incorrect, saying he resigned two years before the collapse of the co-operative after a dispute regarding the budget.
"The budget didn't work from our perspective - it worked on a number of impossible assumptions and all through it there was a higher cost base than there had ever been before so myself and a couple of other directors rejected it," he said.
"Ultimately we had to resign and two years later UFC went under which was sad but indicated what we (the resigning directors) did was correct."
A staunch supporter of CBH remaining as a co-operative, Mr Dempster said the Board had to be united in its purpose.
He said in the past the CBH board had "competing purposes and direction" with past directors pushing to corporatise the 83-year-old co-operative.
"It creates a divided board and you really have to be united in your purpose and your purpose as a co-operative is to bring benefits to your members," he said.
"If you've got a corporate mentality your objective is to take profit from the grower to reflect in the share price and corporate profit, so having someone with that viewpoint is pretty negative.
"Everyone (on the Board) is of the view that we are a co-operative and trying to make it work as a co-operative."
Of the rejected AGC proposal, Mr Dempster said the reward versus the cost to growers was "nowhere near enough" for the proposal to be considered more broadly by growers.
CBH directors came under fire for not allowing growers to consider the proposal in full before it was rejected in March last year.
"The Board had a responsibility to investigate it and if there was some merit then the Board might take it to the members but it didn't have that," Mr Dempster said.
"If people wanted to corporatise CBH - and that was one of the questions in the survey - you'd be far better corporatising it as CBH. All the members get the share, there's no bleed off of value, which would have been a far better way than what (AGC) were proposing."
Mr Jones confirmed the email and text message exchange and said he held no malice towards Mr Dempster, but had concerns in regards to his experience.
"I've asked (Mr Dempster) some very simple questions in public meetings about the weighted average costs of capital that CBH uses, the hurdles, rates they use for investments and he was all at sea. This is basic economic language," he said.
"Personally, I don't have a problem with Vern, but I don't think he has the ability - we're in a very precarious position in agriculture at the moment and even (CBH chief executive officer) Andy Crane acknowledged in the recent annual report announcement that we are losing market share to the Black Sea, there's only one way to create margin and that's tightening the supply chain."
He said the AGC proposal would have seen $60-80m taken out of corporate overheads without affecting people, receivals or shipping processes.
In the 2015-2016 annual report, CBH reported spending $192m on employee benefits, which is up three per cent on last year's $186m.
"If you look at that $80m in terms of last year's 16mt crop, that's a $5/t receival fee. If you said to any grower 'do you want to take $5/t off your receival fee?' I bet you they would put their hand up and say yes," Mr Jones said.
When asked why he did not stand for the election himself, Mr Jones said he had considered it last year but decided not to nominate due to his conflicting interest with AGC.
He said there was "no alignment" with any director nominees, including Stuart Mussared, who is running in District 2 against Mr Dempster.
"I don't know what his platform is and so there is no alignment with him or with any of the potential board members in regards to AGC," he said.
