THE origins of co-operatives in Western Australia are rich in the need for farmers to assume control of their own destinies.
Co-operatives included Wesfarmers (original owner of 6WF AM radio station to communicate with their farmer shareholders), WA Wheat Pool (later Grain Pool of WA) and Co-operative Bulk Handling (to facilitate the accumulation and storage of grain).
CBH has from it's origins provided us with the security and safe storage of the multitude of grains that we produce.
Over time CBH developed world-class port facilities to complement the upcountry storage network.
The Grain Pool of WA was absorbed into the CBH Group in 2002 and thus became a marketer in addition to the previous core operation.
Co-operatives are based on loyalty and trust and can only distribute profits as trading rebates which are tax-free.
Fast forward to today we have the situation where the CBH board seems to have forgotten the loyalty bit where we have an estimated $500 million profit generated from the Marketing and Trading (M&T) division and which the board intends to shift into the central account of CBH Ltd.
Previously we have had trading rebates paid to participants in M&T when deemed appropriate.
We all understand that funds are needed to enhance facilities to handle the two probable record 24 million tonne crops in a row which we have been fortunate to experience.
However the problem with what is intended with this windfall profit is that future grower loyalty to M&T goes out of the window and erodes the co-operative principals on which our company is based.
This to me seems to be a quick grab for some cash which does not reflect on good corporate etiquette, certainly not good co-operative principles such as loyalty and trust.
I don't think that the majority of participants who contracted grain with M&T would expect the full share of the $500m profit, but if their loyalty is not acknowledged then can we expect growers to support their own company in the future.
CBH Grain is not always the best bidder on the day that I sell but I am willing to forgo a few dollars for security and loyalty.
May I remind you of a reference in the 'History of AWB' that we need to be mindful going forward.
"The increases in Australia's wheat production in the meantime had placed the country's smaller, independent farmers more or less at the mercy of 'parasitical' wheat buyers both at home and on the export market," it said.
"Indeed, throughout the 1930s, the worldwide international grain trade was dominated by just five companies: Cargill, Continental Grain, Andre, Louis Dreyfus and Bunge and Born."
The CBH board needs to plan ahead carefully to preserve the members loyalty and trust.
