CBH board member candidates in district four are the first in this year's member director elections to be profiled by Farm Weekly to help growers in that district to make up their mind.
District four covers the southern Wheatbelt and western section of the Great Southern, from Darkan, Wagin, Lake Grace and Newdegate in the north to Albany in the south.
Long-serving incumbent, CBH chairman Wally Newman is being challenged in district four by a former CBH Lake Grace area manager, Shane Carruthers.
Farm Weekly asked each candidate to answer six questions.
The questions were:
1. What motivated you to nominate for the CBH Group board as a member director at this election?
2. What key qualities or experiences do you believe you can bring to the CBH Group board?
3. If elected/re-elected what, if any, changes to the corporate structure of CBH or to the way its various business units operate, will you strive to achieve in your term as a member director?
4. CBH Group's core operations business has provided consistent profits, but the marketing and trading division and some external investments have not been as consistently profitable. In your view, should CBH focus more on its traditional, profitable operations area and perhaps less on marketing and trading, external investments or any other business areas you might consider 'non-core'?
5. Western Australians are regularly told our production costs are too high, putting our commodities at a price disadvantage to competitors on international markets. As a CBH director, how would you rationalise the grower-driven requirement to maintain an extensive network of grain delivery and storage locations offering multiple segregations, with the need to trim paddock-to-port costs?
6. Is there anything else you think CBH Group members need to know?
The district four candidate's responses are below.
Responses of district one and two candidates to the same questions will be published in Farm Weekly in coming weeks.
CBH members in districts one, two and four should already have received a ballot pack.
They need to vote before the close of the poll at 10am on Monday, February 17.
The results will be announced following the counting of votes on that day.
For further information regarding the CBH Group member director elections contact WA Electoral Commission returning officer Phil Richards, phil.richards@waec.wa.gov.au or 9214 0443.
WALLY NEWMAN, NEWDEGATE
Answer 1: I was originally requested by growers to join the CBH board in 1999-2000 on a platform to defend and retain the co-op structure of CBH.
Back then CBH was a small tooth in a big cog of the grains industry and today we are the largest in the Australian grains industry and the biggest co-operative in Australia.
I have developed a substantial knowledge base on a wide range of CBH issues over 20 years and if re-elected, I will be more than able to use this knowledge for the betterment of our growers and pass it on to others.
Answer 2: Knowledge, experience and the ability to see how we can do it better, along with determination to implement change where required.
My experience includes farming at Newdegate - I purchased the 2023-hectare family farm in 1972, now 16,187ha and run by my two sons independently of each other with approximately half each.
Lee and I are still involved in the home farm, along with our youngest son Charlie.
I am the longest-serving director on the current CBH board with 20 years of experience, I had 25 years in local government, I was instigator, member and former president of the Newdegate Machinery Field Days and commercial founder of Newdegate Seed Works and various other business investments.
Answer 3: This question is about education and understanding how the various business structures and tax implications work, more importantly who the beneficiaries are of the structures.
In the current non-trading co-operative growers are the only beneficiary, no other body or entity other than the grower is benefiting from the business supply chain.
This is what sets us apart from others in the Australian grains industry and wise educated growers are most unlikely to change this core structure.
As a board we are constantly assessing ways growers can be directly involved in CBH investments if they choose to do so.
I have learnt a tremendous amount about co-operatives and other business structures from Queen's Counsels in corporate law and other corporate experts in my time on the CBH board, having been deeply involved in all structure issues since the 2000 restructure.
I will continue to pass on as much of this knowledge as possible during my term on the board.
Answer 4: CBH has experienced six of its highest production years in its history, all consecutively until the 2019 season.
It has been an exceptionally good run of seasons for CBH.
Having been a director of CBH when it was only storage and handling grain and had no other opportunities to diversify its income, I am aware of years where due to bad seasons construction and repairs were regularly cut to fit the budget.
Most grains businesses around the world, including co-ops have diversified their businesses to help drought proof their operations so they are not just dependent on storage and handling.
Co-ops also have a marketing arm to put a base into the market to protect their growers from situations as occurred back in the 1930s when growers were at the mercy of merchants and the bag the wheat was in, was worth more than the wheat it held.
CBH Marketing and Trading (M&T) is run very conservatively with substantial reserves built up from retained surpluses over many years to allow for unknown situations that develop, as was the case in the 2018-19 season when growers were paid more than M&T marketed their grain for.
This was due to political events in China, Canadian wheat being imported and the run of droughts on the East Coast.
CBH investments are a very small part of its business, most years they return a rebate and going forward I am confident that rebates from investments will again be positive.
Investments are like farming, it's not always positive.
Answer 5: This has been a great challenge for many grain handlers around the world, especially for co-ops where members expect all members to be treated equally.
To provide a service equally to all members over the distances CBH covers is price prohibitive and would make all growers uncompetitive on world markets.
The board has been conscious of the inequities some growers have incurred.
On a logistics tour to Canada in 2004 I was made aware of a system Agricore United used to address this very concern which relates basically to the distance a grower is from their nearest grain facility.
I have been a promoter of the concept for many years now and with the rationalising of the network to 100 sites from 196, the board is seriously again looking at ways of reflecting the level of service provided to our growers and pricing to treat growers equitably to help offset some of the costs a small percentage of growers have incurred.
Answer 6: CBH makes a substantial impact on the success and viability of Western Australian grain growers, it is the largest co-op in Australia, with an annual turnover of approximately $4 billion per year.
See IBIS World's 2019 top 20 private company rankings list - 1st Visy, $6.9 billion, up 3 per cent; 2nd Hancock Prospecting, $6.08b, up 21.1pc; 3rd CBH Group, $3.96b, up 6.6pc.
The CBH board is no place for amateurs without experience to make a start.
Its success and ultimately grower's success are only as good as the directors growers elect to the board.
Merit-based selection for directors is essential.
We need our very best grower leaders with experience and ability on the board and it is the very reason I have been so passionate and determined to promote leadership education and strongly promote the CBH Growers Advisory Council (GAC) and its alumni to help create a pool of prospective leaders in our communities and potential directors of CBH for its success well into the future.
SHANE CARRUTHERS, LAKE GRACE
Answer 1: My nomination is motivated by a sincere passion for CBH and consistently listening to growers who are concerned about the decisions being made and the lack of accountability of growers' funds.
Answer 2: I bring many years of experience from the front line in storage and handling, from receiving grain right through to shipping.
There has been no director to my knowledge since Imre Menchelyi who has actually operated at this level for a considerable period of time to actually see how we can service the growers more efficiently and fairly.
Growers' funds are continually being used to heavily subsidise other investments and divisions in the CBH Group.
Answer 3: The corporate structure should be no different to any other business.
These business units and investments need to stand alone and return a profit for the grower members, instead of consistently wasting growers funds to the detriment of our core business of storage and handling.
I would also be a strong advocate for fixed terms for directors so we can encourage our future growers to gain the necessary experience to take the CBH Group forward.
Answer 4: The past five annual reports clearly show that on average over the past five years, the combined losses of the business units and investments are in excess of $180m.
The storage and handing business has been subsidising these other business units for far too long.
These funds need to be put towards improving the storage and handling, ensuring grower sustainability and a fairer system to every member.
If growers are not sustainable, there will be no requirement for these other business units.
Answer 5: These production costs could be significantly reduced with better decisions and accountability which would reward the grower who is the start of the supply chain.
The network was built to treat each grower fairly and there is still a lot of these storages that are very operational but have deteriorated because we have gone away from our core business.
The excuse that they are too expensive to run is in a lot of cases untrue and with considerable thought, improvements could be installed to utilise these sites.
The thinking should be how can we accommodate all growers fairly.
The storage and handling system has for years now been run for the marketers, not the growers who built and paid for the network.
I have personally seen many times capital expenditure on our network lacking thought and accountability.
The old saying 'it is very easy to spend someone else's money' applies.
Answer 6: I have, over many years, listened to growers' complaints and frustration about a storage and handling system that was, with a lot of thought and due diligence, built and paid for by the grower members.
It is one of the best in the world, but we need to invest more of "our" funds in "our" system and make it fairer for all grower members.
Experience does count and I have the many years' experience at the front line where it is needed.
I urge all grower members to exercise their right and vote.
Last year less than 50pc of members in district four voted.
If elected, I will dedicate the necessary time to strongly represent all growers fairly and equally.
It is very clear it is time for change, vote now and make it happen.
