PGA's CBH stance too much for Newman

19 Dec, 2014 01:00 AM
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CBH chairman Wally Newman informed the PGA last week that he wouldn't be renewing his membership in the farm lobby group.
Perhaps he needs to curry favour from other Board members...
CBH chairman Wally Newman informed the PGA last week that he wouldn't be renewing his membership in the farm lobby group.

ESCALATING dissatisfaction with the Pastoralists and Graziers Association's (PGA) Grains Committee has prompted CBH chairman Wally Newman to dump his membership.

It's understood Mr Newman has reached an impasse over persistent "anti-CBH" lobbying by PGA's long-serving members Leon Bradley and Gary McGill and Grains Committee chair John Snooke.

Last week Mr Newman informed the PGA he wouldn't be renewing his membership which ignited a robust debate at the farm lobby group's executive committee meeting, where new membership applications and non-renewals are discussed.

It's believed Mr Newman cited "a difference of opinion on grain issues" as the formal reason for abandoning his PGA subscription, in his official notice.

Farm Weekly understands internal pressure is building on the PGA Grains Committee, from other commodity groups within the organisation, due to a spate of concerning membership losses.

Recent departures include former committee deputy chair and Grains Producers Australia western director Barry Large who quit in mid-2012 over a difference of opinion on national grains industry representation and a backflip on support for the GPA model.

Grains Research and Development Corporation director and large Mid West graingrower Kim Halbert also relinquished his PGA membership about three years ago over increasing concerns with the committee's consistency in lobbying on key industry issues.

Mr Halbert - a former director of the Grain Licensing Authority in WA and Wheat Exports Australia - wrote a detailed letter to the PGA outlining his concerns.

Other grains industry members have also expressed frustrations at the PGA's hard-line liberal economic views in lobbying issues like the port access code of conduct for wheat exports and CBH structure.

Mr Halbert recently responded to criticism of the GRDC levy, which the PGA wants halved and matching government funding removed to increase focus on commercial outcomes, taking a thinly veiled swipe at the PGA.

"The criticism (of the GRDC levy) comes from a very small group and most of it's got ulterior motives," he told ABC Radio.

When contacted for comment by Farm Weekly, Mr Newman expressed shock that information about his PGA membership non-renewal had been exposed.

However, he declined to comment, instead referring questions to a CBH spokesperson who said there was no formal requirement on the CBH chair or any other Board director to hold membership of the PGA or WAFarmers.

The spokesperson said Mr Newman's decision not to renew his PGA membership was a personal choice and not a company directive.

But in an interview with Farm Weekly following the snap resignation of independent CBH Board director Samantha Tough last week, Mr Newman took aim at the PGA's Grain Committee.

"The PGA represents about three per cent of the throughput in our actual grain but they have huge clout in the press, because they get 50 per cent of the press," he said.

"But they've done untold damage to WA growers, particularly in the port access code and our tax exemptions and those sorts of areas, where they've cost WA growers a lot of money and I'm talking millions of dollars not just a few dollars."

Mr Newman also criticised the PGA's ongoing campaign to try and corporatise CBH and hit back at suggestions the co-operative's Board was compromised by agripolitics.

He said CBH grower directors are democratically elected which wasn't any different to government processes and other successful organisations.

"You always get politics but you would hope that the members would vote for the people that they believe will do the very best job in running the co-operative," he said.

Given the CBH chair's traditional staunch support of the CBH co-operative model, Mr McGill said he'd often wondered why Mr Newman had joined the PGA in the first place, about a decade ago.

"Imagine my surprise when Mr Newman turned up at the PGA annual general meeting some years ago," he said.

"I thought then he wasn't genuine and therefore was being opportunistic, as I do now."

Mr McGill said he also recalled Mr Newman "lauding the virtues of the PGA for being right on grains issues".

He said Mr Newman had now "changed his mind like all politicians do, when it's expedient to do so".

"Perhaps he needs to curry favour from other Board members because his hold on the chairmanship may be tenuous," he said.

"I am not at all concerned that he's resigned and I sometimes believe that the PGA is better off without such feigned attachments."

Mr McGill said Mr Newman's remarks about the PGA Grains Committee costing WA growers millions of dollars was "unbecoming" for the chair of a multi-billion dollar company.

He said given the comments were made in response to criticism about agripolitics influencing the CBH Board, "he's answered the question and proved the point".

The Calingiri grower said his committee's lobbying efforts had returned more financial benefits to WA growers than Mr Newman had estimated in losses, in particular following the deregulation of bulk wheat exports.

"Some people may think that because we only represent a certain portion of the harvest our argument should be diminished," he said.

"But the argument should always be regarded on its merits and in that regard we've had some big wins over the past 20 years.

"And the big one was the intense campaign, based on the merits of our argument, which was able to persuade the Federal Government to deregulate export wheat in 2007-08.

"That campaign has resulted in great benefits to WA wheat growers through the new export arrangements.

"Everybody knows that and that's why no one is complaining about it and we're proud to claim it."

PGA resident Tony Seabrook said he regards Mr Newman as a friend and that he had spoken to him and they both committed to maintaining an ongoing dialogue on CBH issues.

Mr Seabrook said he believed Mr Newman was under pressure to "clean up" any potential conflict of interest as chair of CBH, which prompted the non-renewal of his PGA subscription.

"I don't think this is a massive slap in the face," he said.

"Wally has been asked to clean up a potential conflict of interest given a lot of CBH Board members don't agree with the PGA Grains Committee's views on key issues but we're not taking any great affront from that," he said.

Mr Seabrook said the grain committee had challenged the views of industry stakeholders over an extended period of time but had also invoked a high degree of "intellectual rigour" on policy debates and decision-making, which had improved outcomes for growers.

"Their views are not always popular and they've stirred some people up to blind anger on occasion but over time they have been proven right," he said.

Mr Seabrook also rejected suggestions the PGA's membership was impacted negatively by the grains committee's hard-nosed attitude on key policy issues like CBH corporatisation.

He said PGA's membership had been static over the past 10 years which contrasted to an "exodus" in memberships from WAFarmers.

Mr Seabrook said PGA's annual budget had also produced a surplus which was "remarkable" for most farm representative groups in Australia.

He said overall, the agricultural industry had bigger and more important battles to fight, "rather than starting bushfires ourselves".

Mr Seabrook said PGA wanted to see CBH corporatised but needed 75 per cent approval in a formal shareholder vote, to change the co-operative structure, "and at the moment we're a long way from that".

In a recent interview with Farm Weekly, Mr Snooke said most growers and industry analysts believed the CBH corporatisation issue had been resolved but "it's never going to go away".

"It's the PGA's position that there needs to be an equity release for the members of CBH," he said.

"Firstly, we believe a corporatised CBH will be the best way to bolster that company going forward with competition emerging.

"Importantly, it will release much needed equity for WA farmers.

"Given there's at least $12 billion worth of debt in the Wheatbelt, releasing $4b of that to growers' balance sheets will make a massive difference."

Colin Bettles

Colin Bettles

is the national political writer for Fairfax Agricultural Media
Date: Newest first | Oldest first

READER COMMENTS

Deregul8
19/12/2014 12:15:30 PM, on Farm Weekly

It would be nice if CBH shareholders had the same luxury to pull their membership from the co-operative eh Wall when they are unhappy with its direction?
drowning in debt
19/12/2014 1:09:13 PM, on Farm Weekly

what a joke! of all the things this bloke could address in the media, a bloke in charge of the future of $7 bill of shareholders' equity about to be polaxed by the arrival of serious competition, he chooses his pga membership! this is proof politics runs the company and why it is doomed. theres only so long it is worth keeping your $2 share active as an exiter from the industry. if only the forefathers who corporatised wesfarmers were still around.
Roger Agnus
19/12/2014 1:24:28 PM, on Farm Weekly

Whilst I largely choose to ignore the politics of WA grains, I do think the Chairman of a company controlling the hard earned equity of mine and many thousands of other WA graingrowers, would be better focussing on how he can deliver not only value to shareholders but equity.
Hebe
20/12/2014 2:16:34 PM, on Farm Weekly

Far out! That must give the PGA single figures now?
Pete Royson
21/12/2014 8:38:22 AM, on Farm Weekly

Im getting sick & tired of this tit for tat. Really, all shareholders care about is lower costs & if we aren't getting that, where is the door to our equity? Its encumbant on the CBH board to address the issue of competition &grower equity largely because the shareholder base needs reassurance the board actually sees the competitive threats that clearly exist out there, eg Bunge, Dreyfus etc. An assault on our 6mmt Kwinana zone will leave CBh in a very compromised position.
seethelight
21/12/2014 3:46:19 PM, on Farm Weekly

Mr Newman's figure that PGA members produce 3% of the grain is a revision of an earlier figure of 6%. It implies precision that CBH could not possibly have unless CBH was searching their data base for the production levels of shareholders that they have identified as PGA members. It would be hard to estimate the number of laws that they are breaking by this process let alone their own constitution. For these reasons many PGA members are careful not to make it known that they support the PGA with membership or in principle. Those that haven't and don't want the aggro should follow the example.
Bob Phelps
22/12/2014 8:25:00 PM, on Farm Weekly

The PGA's militant promotion of genetically manipulated (GM) canola has alienated growers, most of whom remain GM-free. Monsanto promised end point royalties to share the risks but withdrew, and then escalated the input costs for GM seed and branded Roundup, plus segregation, transport and lower prices affect profitability. The promises of future GM varieties for drought and salt tolerance, higher yields, nitrogen fixation in grains, better nutrition, etc. are just hot air. PGA supports corporate mates to gut CBH, to skim the cream from selling it off and forcing GM down our necks. Not on!
torobrook
23/12/2014 9:44:35 AM, on Farm Weekly

Phelps rant just shows how off the planet he and his ilk are. The facts remain . Gm canola production in WA continues its steady climb because growers see the benefits. Just combining every conspiracy theory he can think of. Gee he must hate the PGA.
Relle
23/12/2014 10:01:15 AM, on Farm Weekly

Yes poor old Phelps must hate them. A bitter defeat for his mob with the Baxter/Marsh outcome. PGA seems to be always right in the end on the big reforms in agriculture. The demise of the WA compulsory lamb marketing scheme, advocacy for the end of the wool reserve price scheme, support for deregulating the domestic wheat market, removal of state based statutory grain marketing and the big one of removal of single desk for wheat. And don't worry Bob they will be right on CBH also.

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