CBH 'war' on inquiry agenda

11 Feb, 2015 01:00 AM
Comments
21
 
We are now constantly seeing a factional war playing out on the board and it is spilling over

RECENT public infighting among CBH directors was a focal point of questioning at last week’s Senate inquiry hearing into grain logistics.

Western Australian Pastoralists and Graziers Association (PGA) grains committee chair John Snooke told the Committee concerns about the CBH board’s “public factional war” were escalating in WA.

“We are now constantly seeing a factional war playing out on the board and it is spilling over into the media,” he said.

“Just recently I have had numerous members call me who are very, very upset by this public factional war that is being played out.

“They are looking at their balance sheets, which are struggling, and they see this equity in CBH that they cannot realise.

“But the value of CBH at the moment would be in some decline.

“Without going into the nitty-gritty of each issue, that tells you of the broader frustration that is really developing in WA.”

PGA wants CBH privatised

Mr Snooke said the PGA wanted to see a board that operated commercially, “like other companies in Australia”.

He said the PGA questions the way CBH is being managed and operated but “our members still identify that they have equity in the company”.

“Firstly, we would want to see CBH privatised so that it is operating by profit and loss, and not by legacy loyalty,” he said.

“That is where our members are getting very concerned. When we look back at the CBH board of the early 2000s, they were trying desperately to prepare the company for the changes that would inevitably occur in the industry.

“Our members are having problems when they do not see those changes. We are not seeing any rationalisation. We are not seeing CBH wanting to earn its business.

“It wants to retain its legacy loyalty by way of business rules.

“It is those things that are frustrating our members.”

WA Greens Senator Rachel Siewert moved to clarify the board room scenario during her questioning of various witnesses, including ascertaining whether the infighting was due to differences of opinion over the co-op or corporate structure.

Mr Snooke said he did not believe that was the issue – which CBH chief executive officer Dr Andy Crane agreed with. “I do not think that at a board level that issue is being debated at all,” Mr Snooke said, noting that the current “ructions” on the CBH board were playing into a current climate of uncertainty in WA.

“Everyone is talking about it,” he said.

Dr Crane told the federal Senators, “You live in a political world, so I think you would fully understand”. He said the board situation resulted from “the machinations of a normal co-operative member based organisation”.

“We have nine grower directors elected to our board,” he said.

“We have 12 directors, and three are non-grower directors who bring external experience as well.

“Strong robust debates, I think, are healthy. It is often perceived as a downside of the co-operative, but I actually think it is a strength because what it is saying is that members are working out what they really want the business to do for them.

"Sometimes that spills out of the boardroom, but I do not see a negative in it and it is certainly nothing to do with - and I agree with John Snooke - a co-op corporate debate.

“Our board is very unified that the cooperative model is delivering the best for our growers.

“So this is just more passionate debate about what is right in a whole range of issues.”

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FarmOnline
Colin Bettles

Colin Bettles

is the national political writer for Fairfax Agricultural Media
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READER COMMENTS

Consolidated
11/02/2015 6:31:53 AM

Any environment that stifles competition for our grain will ultimately lead to lower prices and likely higher CBH charges. This is a retrograde step if implemented which will also see the co-op emboldened to use its monopoly to fight the competition rather than compete on even terms. When was the last time anyone sold wheat to CBH because it was posting the highest cash price? Can honestly say I have never sold a grain of wheat to CBH as a cash man.
Deregul8
11/02/2015 6:43:02 AM

With the recent dollar dip, we are likely only months away from some major investment decisions in storage and handling in the key Kwinana zone. The multinationals know that in order to destroy CBH they simply have to target their most profitable 2-3mmt and the rest of the asset base will be bought for a song. These companies have massive balance sheets and are prepraed to loss lead if the goal is to break this monopoly into smitherines. CBH has limited power to compete with such a strategy unless it hikes charges or goes to the bank to increase the overdraft.
torobrook
11/02/2015 7:43:32 AM

Watch out for the raving co op disciples spitting bile at the PGA for daring to suggest CBH be corporatised, something that a grower elected board proposed in 2000 with a 60% approval from 9000 odd shareholders but falling short of the 75% required. The bitter infighting on the board is not about differences over structure but more about personality and personal aspiration. You get that when you're a political organisation.
Jock Munro
11/02/2015 7:47:54 AM

deregular, when you are a stooge for the merchants you are not expected to be so honest! It beggars belief that you call yourself a grower yet you are working against your own interests. You are probably doing it free of charge as well - poor fellow you. Of course the merchants are going to operate at a loss whilst CBH is a co op because they cannot compete with a well run mutual.
Jed
11/02/2015 7:55:16 AM

Who is PGA working for? Once I thought it was for their WA members but now I wonder what foreign power rule them as they continue to want changes that only benefit foreign multi nationals.
torobrook
11/02/2015 7:57:02 AM

Furthermore with this forthcoming election with candidates desperately trying to differentiate themselves whilst grovelling under the co op banner nothing will change. After listening to their advocacy the thing will be riven with populism and further dumbed down.
mim
11/02/2015 10:03:09 AM

Jed, it's about accountability. What is CBH frightened of - competition? CBH has no reason to deserve a preferential treatment via regulation? All grain handlers/commodity purchasers must have equal Government regulation. CBH is not special it is a monopoly from the past relying on scaremongering to keep it's hold over growers. Shareholders of CBH deserve to have their equity NOW!
GFA
11/02/2015 1:40:29 PM

Jed and Jock Munro are the only sincere growers and straight honest posters on this topic. The rest are clearly paid or unpaid mouthpieces for International Traders who (unlike CBH) will always put their own profits above growers interests.
Harold
12/02/2015 6:05:12 AM

Deregul8, would that loss leading be anti-competitive behaviour? perhaps its time we reviewed loss leading behaviour, we seem to review everything else except the most commonly used practices for market distortion.
Just a Farmer
12/02/2015 6:32:54 AM

How many people here who are anti-CBH are actually from WA. If you asked the WA growers, we would prefer to retain CBH as is. It's only the PGA who want it gone and they support such a small group of graingrowers
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