Saleyard lease loophole

Lease arrangements for the saleyards are currently up in the air, after WALSA missed the deadline to extend its lease until 2022.

WALSA – an association operated by Elders and Landmark – was required to submit written notice to the Shire of Capel by March 30, 2017, of its intent to extend its five-year lease arranged in June 2012 for an optional second five year term.

However, the Shire of Capel did not receive the required written notice until May 15, despite WALSA’s desire to extend the lease.

WALSA chair Geoff Shipp said the association had taken responsibility for failing to meet the required deadline.

“It was an administrative error, it’s as simple as that,” Mr Shipp said.

“We have submitted something, but yes it was late.”

WALSA brought a new lease proposal before council last Wednesday, June 28, seeking a new five-year lease operating until June 30, 2022.

Primaries of WA general manager Andrew Lindsay attended the meeting and presented the option of opening up the Boyanup saleyards for other stock agents, other than Elders and Landmark, to use the saleyards to the council.

Mr Lindsay said bringing other stock agents into the saleyards would bring many benefits to the Shire of Capel and the South West.

“Livestock is our largest division, if we had access to Boyanup we would employ more people and typically they would be local people,” Mr Lindsay said.

“It also opens up more competition, so despite the fact that you might have the same buyers in terms of the same processors being active, all agents have their own buying network across the State so allowing us or Westcoast Livestock into Boyanup opens up a higher network of potential buyers so it would have to increase competition.

“I think opening up to competition just brings more corporate support to the local community.”

Westcoast Livestock WA cattle manager Phil Petricevich said representatives from Westcoast Livestock were not present at the council meeting, but would like access to the saleyards.

“I think all independent companies would like to get access to the Boyanup yards,” he said.

“We have clients who would like to use that facility and can’t because they can only sell there through Elders and Landmark.”

A short-term lease extension of three months has been carried by council, allowing chief executive officer Paul Sheedy to seek legal advice and investigate the option of allowing other agents into the yards.

Mr Sheedy said several options were being explored, but council’s priority was ensuring the Boyanup saleyards were accessible for producers.

“There’s a number of things that we need to get some legal advice on in regards to ownership of the infrastructure and the ability to let other users in,” Mr Sheedy said.

“It’s fair to say that over recent times there’s been increased inquiries or increased requests for that to happen.

“WALSA have chosen not to, because of the infrastructure they’ve put in on that, so that will be one of the considerations that the council will look at going forward.

“Hopefully we’ll be looking at a five-year lease so the desired outcome really is to make sure at the end of this period whoever the lessee is, we have the saleyards continue to operate for the next five years because there is a need for them in the South West.

“Whether that involves just one lessee that has sole operating rights or whether it’s one with others, that’s a matter for council to make that decision.

“You’ve got to weigh up how that would work.”

Mr Shipp said WALSA was unwilling to allow other stock agents to use the facility, as it had invested heavily in infrastructure and maintenance over several decades for the use of Elders and Landmark clients.

“We’ve been there for over 60 years, we’ve spent a considerable amount of money over that period,” Mr Shipp said.

“We’ve done a very good job of servicing our clients down there for a very long time, and (maintaining) the facilities there for our clients.

“We’re concerned about some of the health and safety ramifications of having more people and more cattle there – we think that’s potentially an issue.”

Mr Lindsay said although WALSA had made significant contributions to infrastructure at the saleyards, it had also profited from those investments.

“All businesses invest in infrastructure in operations that make a financial return,” he said.

“I don’t see it as any different as the saleyards being owned by the government or the shire such as what happens in Muchea – they will still get a yard fee.

“It’s a user-pays system so while they’ve obviously put money in over time, it’s the local growers that actually pay for those yards through a yard fee.

“My view is that WALSA don’t want competition, they realise that in our case in the markets that we are active, we have 20 to 30 per cent market share.”

It’s not the first time WALSA has missed a critical deadline relating to the Boyanup saleyards lease arrangements.

In March, 2012 WALSA was required to contact the Shire of Capel to extend a 10-year lease that began in 2002, to express its intent to accept a 10-year extension.

WALSA missed the required timeframe to exercise the option for extension, and a new lease had to be taken before the Shire of Capel council.

Council approved a new lease based on similar conditions for a period of five years commencing on July 1, 2012, with an optional five-year extension.

Mr Shipp said WALSA had now introduced several preventative measures to avoid future oversights.

“We’ve made some quite significant changes to the structure to make sure this type of thing does not reoccur,” he said.

“We’ll have much more robust reporting.”

Mr Sheedy said the Shire of Capel hoped to resolve future lease arrangements as quickly as possible.

He said he hoped to fast-track legal advice and have necessary information back to council by August.

WALSA’s three month lease extension expires on September 30, 2017.