THE equal and fair treatment of growers by CBH Group has been called into question after it was revealed only certain members would have access to the first harvest pool this year.
Pools are a tool offered by CBH to provide an easy way for growers to diversify their grain marketing with different time frames and risk profiles to achieve consistent results over time.
Typically, the co-operative offers three pool products each year - Flexi-Starter, which all growers had access to in June and two seperate harvest pools.
For the current pool product - the first harvest pool - participation has been limited and only some growers have been allocated access based on their use of the tool over the past few seasons.
Marchagee grower Michael O'Callaghan, who has used pools in the past and does have an allocation for this harvest, said the new access system limiting the growers who can access the number one harvest pool was "unfair and wrong".
"Why the CBH board passed this unfair system is a mystery - I'm positive they understand CBH should treat all members equally," Mr O'Callaghan said.
"CBH members who have been using pools do so because they believe it is the best price mechanism and has the easiest management system - they are making a business choice, not a commitment or loyalty to a CBH decision.
"In this current grain marketing environment pools are more lucrative than ever and I believe it is unfair that all members don't have equal access to the number one pool.
For this harvest, participation in the pool has been offered to growers who have used CBH pools over the past four years and a participation rate was calculated by considering the grower's average pool participation over that time and any tonnes already committed to 2022/23 CBH pools.
That participation was then pro-rated to a figure which aligns with the pool's ability to accept tonnes, with growers who were offered an allocation provided a commodity-specific contract for the calculated volumes which they could elect to take up in full, accept at a reduced volume, or decline.
A spokesperson for the co-operative said CBH took this approach to ensure growers who consistently rely on CBH pools to market their grain were not unfairly affected as a result of the constraints faced this season.
"This is expected to be a temporary adjustment recognising unique circumstances and constraints in relation to our changed annual shipping capacity, increased popularity of pools, the larger than average harvest carryover and another large harvest forecast this year," the spokesperson said.
"Given the need to fit demand into pool capacity to accept tonnes, it is likely that even growers who have used the pool at 100 per cent in the past will not receive an allocation to the harvest pool adequate to satisfy this requirement."
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There are already more growers using CBH pools this season than at any stage in the past 10 years and this escalated in the 2021/22 season with the 24 million tonne record harvest.
With delays in getting grain from country to port in a timely manner causing Western Australian grain to be discounted in comparison to global prices, the need to ship grain in the first half of the year has never been more apparent.
In general, grain sold as part of a pool tends to receive a priority shipping slot allocation and given the current pricing situation, this has created a big advantage to use pools, especially one which is potentially guaranteed slots early in the year.
Mr O'Callaghan said with a management fee of $7 per tonne and priority shipping slots, pools were a very good marketing option.
"With negative $100/t for wheat and $200/t for canola difference in the return we should be getting for cash sales, pools with a small management fee start to look much more transparent than most of us have thought in the past," he said.
"It is hard to believe that cash sales are now providing a marketing system that is producing a mechanism with a buffer for large profits for grain marketing businesses."
It should be noted that once the process for the first pool has been completed, a second will be opened by CBH and that will be available for nomination to all growers.
However, this pool will have a delayed marketing program as it is expected it will only have access to shipping capacity from October next year.
Mr O'Callaghan said it was predicted that it would not have anywhere near the value per tonne as the number one pool.
"A fairer system would be to set up a pre-commitment to the number one pool with a date announced when access starts and give all members equal opportunity of access," he said.
"Or, open the number one harvest pool in early January and once again grant equal access for all members."
