Wheat co-op push against the grain for some

Farmer Brad Jones is being painted as a rebel amid a push to restructure the CBH grain co-op.

Grain grower Brad Jones (43) with his wife Kate Raston and their daughter Nina Jones (1 1/2) on their property 'Bungulla' near the town of Tammin is leading the push to float andsell off CBH. Push by many big grain growers to corporatise and float $3b CBH cooperative.

Tammin farmer Brad Jones doesn’t look much like a national rebel or a corporate wrecker.

But that’s how the big West Australian wheatgrower and ­father of four is being painted, as the leader of a small breakaway farmer group seeking to smash the usually placid landscape of grain-growing in the state.

His Australian Grains Champion company has launched an audacious bid to force CBH, the farmer-owned co-operative with a monopoly on handling Western Australia’s grain crop, to become a profit-making multi-billion-dollar company listed on the Australian Stock Exchange.

Mr Jones, 43, and his proponents argue the massive deal, which contentiously includes selling 20 per cent of a corporatised CBH to listed company Graincorp, would deliver the 4200 farmers who now own CBH a collective windfall of $600 million.

Many growers would also be able to sell additional new shares they would receive in the floated $3 billion CBH for up to $500,000 each.

The 83-year-old CBH business, which has a stranglehold on the transport, storage and export of Western Australia’s 15 million- tonne annual grain crop, owns silos, ports, trains and flour mills worth $1.6bn and sells 13 per cent of the nation’s wheat.

Mr Jones believes its farmer owners — who have received no dividends, saleable shares or lasting benefits other than reduced freight charges — deserve radical change.

“Farm balance sheets would improve (when the cash arrives), which would allow WA growers to expand, innovate more, produce more grain and capture more of the huge Asian market on our doorstep as it grows,” he said.

“Our vision is for a (listed) CBH to be the strongest integrated grain player in Asia; we have to ­remain globally relevant and competitive and position ourselves for 15 years ahead — this is not about destroying CBH, but ­delivering capital to make it better.”

However, the dreams and plans of Mr Jones and his fellow AGC directors are shaking the sprawling plains and white sandhills of Western Australia’s rich grain belt to its core.

Mr Jones and his wife, Kate Raston, who live about 180km east of Perth, say the heated debate is still civil; that the polarised views on the best way forward for the co-operative have not yet spilt over into acrimony on the streets, pubs or swimming pools of the wheatbelt’s small country communities.

But the CBH annual general meeting in Perth this week was more fractious than usual, with chairman Wally Newman arguing strongly against an end to the co-operative structure in general, and AGC’s proposal specifically. “We must ask what Graincorp’s long-term intentions are,” Mr Newman said. He suggested a 100 per cent acquisition of CBH might be the long-term ­ambition of the eastern-state grain behemoth once it secures its initial 20 per cent foothold.

“Another of our concerns is loss of grower control; currently you elect your directors to ensure CBH is being managed for the benefit of all WA growers — this would no longer be the case under AGC’s proposal.”

It is a position that has won over graingrower Angus Cooke, 55, who says he is neither set in his ways nor averse to change.

But the long-time Northam farmer is adamant the business that efficiently and cost-­effect­ively stores, transports, sells and exports his wheat, barley and lupin crop every year must remain Australia’s biggest grower-owned co-operative.

“I’ll be voting no; it’s a sellout,” said Mr Cooke of the pending move to ask CBH grower-­owners to vote to abolish the ­co-operative.

A high 75 per cent must agree to the proposal to turn the business into a massive listed public corporation.

Just a few sandy paddocks away from Mr Cooke’s Stoney Ridge farm, 34-year-old grower Ty Fulwood, from Meckering, has the opposite view.

Having seen many of his farming friends struggle to find cash to start buying the family farm from parents and siblings, as succession plans dictate, Mr Fulwood thinks that growers should not ignore the opportunity to be returned some of the value in the giant business they have helped fund, build and own.

“I’m not anti-CBH; I think it has done an excellent job in keeping (grain transport and storage) costs lower than in other states,” Mr Fulwood said.

“But typically when you farm most of your capital is tied up in the land, so to suddenly get $200,000 in cash plus returns from the later sale of CBH shares, you might be looking at a $500,000 windfall.

“At my stage of life this would definitely help everyone if you had the choice of cash or shares.”