AT THIS stage, major farmer organisations are still digesting the particulars of the Australian Grain Champions (AGC) proposal to corporatise CBH, but it is expected they will follow previously established positions on commercialisation of the co-operative.
The two major farmer groups in Western Australia, WAFarmers and the Pastoralists and Graziers Association (PGA) have differing opinions on CBH.
WAFarmers are in favour of retaining the co-operative while PGA is fierce proponents of corporatisation.
Duncan Young, president of WAFarmers’ grains section, said his committee would take some time to look over this proposal.
“We do not have an official stance on the proposal as yet. It is prudent to look through the details of AGC’s plan and make an informed decision then,” Mr Young said.
He said WAFarmers had a policy of supporting the co-op model, but added that the committee needed to look at the AGC proposal before dismissing it out of hand.
“It’s only right to look at the proposal before forming your opinion.”
PGA Western Graingrowers committee chairman Gary McGill was far more forthright about his organisation’s position.
“We are very supportive of the proposal, for the health of the WA grains industry it needs to happen as soon as possible,” Mr McGill said.
“Our official policy has been the same for the past 16 years, we want to see CBH commercialised.”
“We think the release of equity is a fantastic thing for growers, while we also feel culturally, the blind support of the co-op from some growers does not fit what is happening in the industry today.”
Mr McGill said he believed a corporate entity would be best placed to operate in the deregulated environment.
“There is competition already and the co-operative model is just not nimble enough to work in this space.
“I don’t think growers lose anything by handing over ‘control’ of the business, it will still need to compete for our tonnes to survive, I am not worried about the ownership structure.”
On the national front, Grain Producers Australia (GPA) chairman Andrew Weidemann said fundamentally WA growers had one key question.
“They have to weigh up whether the value of the added equity both for themselves and for the CBH business is worth more than having control in the company.”
He said growers would also be carefully looking at whether the proposal would lower their storage and handling costs.
“They will look at what the changes mean to their own business.”
Mr Weidemann said farmers in other states were watching on with interest.
“Patriotically it would be nice to see a big Australian grains business and east coast growers will be pleased to see further drought proofing of the GrainCorp business (who have will have a stake in the CBH business under the AGC proposal), but it is a decision for WA growers.
“They will also have to think about the potential of the business to change hands, as has happened in other Australian states.”