CBH director urges State to act on Tier 3

26 Dec, 2014 01:00 AM
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CBH Board member John Hassell has called on Premier Colin Barnett and Transport Minister Dean Nalder to be statesman-like and reopen the Tier 3 rail lines before an increase in freight costs put farmers out of business.

Mr Hassell, who farms at Pingelly and is up for re-election in the upcoming CBH director elections, said the State should be taking control of the State-owned asset for the good of the Wheatbelt.

Mr Hassell spoke exclusively to Farm Weekly about the current state of the grains industry.

"The problem I have is, whether the rail is run by Brookfield or not, it's a State-owned asset," he said.

"If you lease it, in my mind there's an implication to run it and if you don't want to run it you should hand it back.

"You shouldn't just leave it sitting there idle and give it back in 30 years time because it's going to be degenerated.

"I'd really like to see the Premier and Dean Nalder become statesman-like and do something about this.

"When it has the potential to remove almost $20,000 from the hip pocket of a grower at Kulin through increased freight costs, something needs to be done.

"For some that's the difference between being viable or having the bank breathing down your neck.

"There are multi-million dollars that are coming out of growers' pockets just because CBH can't run those lines."

A staunch supporter of the CBH co-operative model, Mr Hassell said he would maintain his focus on ensuring the current model of CBH continued, despite support for corporatisation existing in small pockets.

Mr Hassell said he was elected on his support for CBH as a co-operative model and this was not going to change.

"I never take it for granted that we've won the battle and as you can see from the recent press articles, there are still people who want corporatisation," he said.

"I'm just not ever giving up, I'm maintaining my passion for the co-operative.

"It's grower-owned and grower-controlled and it's capturing value all along the vertical supply chain.

"There is a storage and handling and the rail business that is returning real value to the growers.

"We've had shares in a shipping business, we've got the flour mills and much more.

"We're capturing value all along the supply chain and returning those to growers through rebates.

"But I don't think the push for corporatisation will ever go away."

Mr Hassell said the opposition to the co-operative model could "have their cake and eat it too" if CBH was to move towards using the new Co-Operatives National Act capital units (CCUs) capability.

Through CCUs Mr Hassell said members of the co-operative could have their share of the company listed on their balance sheet as capital, but still remain part of the overall body.

He said this would allow members access to the funds when needed for trading, but would ensure the benefits growers received through a co-operative remained.

"If we went corporate almost all of the eastern Wheatbelt would become unviable," he said.

"If we went corporate, even the people close to the city would be paying twice as much for freight and handling than they currently are."

Mr Hassell also touched on recent media reports surrounding the resignation of independent board member Samantha Tough, describing it as a "storm in a teacup."

While he was not willing to speak on his personal position, Mr Hassell said growers could be confident the CBH board was operating effectively.

"It's not unusual for boards and directors to part company for various reasons," he said.

He said the now grower-dominated CBH board was not a concern for the future of the co-operative, but a positive.

"I go in with a political platform and that is that I want to maintain the co-operative and I want to get what's best for growers," he said.

"Independent directors are hired for their expertise, they're hired for the skills we don't have as growers.

"They're there to provide the skills to supplement what we do, not to save us from ourselves, but to supplement what we can do.

"There is no divided board, we function pretty well and we've achieved a lot of good stuff in the six years I've been involved."

Introducing a system for quality optimisation of barley, similar to the current system CBH has for wheat, is a focus for Mr Hassell if elected for his third term.

"Growers are having to mix and match their loads on the farm by harvesting a little in one paddock and moving elsewhere," he said.

"It would be really good if we could do it virtually on the computer like we do for wheat."

He said further supply chain optimisation was also something he would continue to invest his time in.

Mr Hassell said the important outcome from this initiative would be strategic upgrades to the network being based on need, which had the potential to save between $68-$72 million for growers.

"Rather than pressure being put on someone to put money somewhere and rather than political pressure, investment decision-making would be made through analysis of where improvements to the system were needed," he said.

The introduction of independent grain exporter Bunge into the WA system this year was something Mr Hassell welcomed.

He said any good system needed competition and it would drive CBH to improve.

"CBH in the regulated market just floated along and passed the costs along to the growers and that's not right," Mr Hassell said.

"We need to have continuous pressure on us to perform.

"AWB was a mess because we as growers didn't monitor our directors to make sure they were doing the job well enough.

"I as a director should be challenged to ensure that I'm doing what's in the best interest of the growers.

"Competition is the biggest issue for CBH.

"Groups like Bunge coming in and creating a low cost supply chain will put pressure on CBH to perform and that is a good thing."

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READER COMMENTS

Deregul8
26/12/2014 5:06:29 PM, on Farm Weekly

Directors just paying lip service to politically populist issues. At the end of the day, a poultice was spent on many new train configurations that are unable to run at capacity because due diligence was not done on the key asset that was the train lines themselves. These trains have no resale value if the receivers ever come knocking. Do growers want to be forced to invest in rail lines as well? Rail levy anybody?
Kimberley
26/12/2014 5:16:28 PM, on Farm Weekly

Is this guy speaking with forked tongue? Competition good for CBH business. What baloney. CBH losing a million tones will make the whole business unviable. More competition coming and value for shareholders evaporating. Corporitise it and garnish shareholder support. This will keep CBH able to hold on to growers.
Jeff Collins
28/12/2014 1:12:49 PM, on Farm Weekly

Mr Hassell proclaims "There are multi-million dollars that are coming out of growers' pockets just because CBH can't run those lines." QUESTION: Is that because CBH went ahead without performing due diligence and bought a bunch of trains before looking into whether those trains could actually be used to capacity?
X Ag Socialisy
29/12/2014 6:44:17 AM, on Farm Weekly

John Hassell and I have butted heads many times however he is right in saying competition will improve CBH. It seems the only people that fear the emerging alternate grain pathways to our overseas customers are a small Libertarian element in the PGA , an organisation registered as an industrial group.
colin g
29/12/2014 9:01:09 AM, on Farm Weekly

only a matter of time before the state governmnt slaps on a levy to fund tier 3. the vocal minority is going to cost the collective dearly.
torobrook
29/12/2014 3:24:01 PM, on Farm Weekly

X Ag. What a warped analysis . The PGA has and continues to be vigorous advocates for alternative pathways for WA grain from farm to market. Its track record on this is impeccable and crystal clear eg. just ask Bunge. Current wheat marketing arrangements, where competition and grower choice prevails, is testimony to the long standing decades long reform agenda. X it behoves you to explain how competition will improve CBH if you believe Hassell is right. Oh and stop smoking that stuff.
X Ag Socialist
30/12/2014 7:27:05 AM, on Farm Weekly

True Torobrook the PGA advocates competition in exporting grain out of WA. Then when deregulation was imminent, there little minions ran around saying CBH will not be able to compete in the international grain market . Then when CBH is successfully marketing grain . comes the next bit of scaremongering. " CBH will not be able to compete in the grain transport storage and logistics area" . One last thing Torobrock you guys were right about the AWB but you are going to get a flogging on this one
drowning in debt
30/12/2014 8:27:02 AM, on Farm Weekly

socialist, your arrogance and that of the board is in the process of costing marginal farmers dearly, there's a groundswell of farmers on the wrong side of 50 who are angry that this board is not addressing the issue of equity access. we'll keep our shares alive with 200t of shifted grain from mates a year, so let's see how the next vote goes, cobba.
X Ag Socialist
30/12/2014 9:17:53 AM, on Farm Weekly

I am over 60 and farming in the eastern wheatbelt, the next vote concerning deregulation will be a waste of time.
onlooker
30/12/2014 10:20:58 AM, on Farm Weekly

without tier 3, no likely significant road funding & $20 lime in a couple of years on the horizon, the writings on the wall out east the consolidated eastern farmers know the squeeze is coming &their only hope is cross subsidization.
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