Study delves into debate on co-operative

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Tom Taylor has just completed his thesis on CBH. 16 JANUARY 2017
Camera IconTom Taylor has just completed his thesis on CBH. 16 JANUARY 2017 Credit: Danella Bevis The West Australian

Growing up on a farm was the perfect inspiration for Tom Taylor to write his thesis about one of the most topical grain- grower debates.

Mr Taylor, who hails from Tambellup but lives in Perth, said whether CBH Group should remain a co-operative or become a commercial entity still formed a large part of farmers’ conversations today.

It has been four months since a proposal to commercialise the grower-owned group was taken off the table.

In September, Australian Grains Champion, backed by GrainCorp and the First State Super superannuation fund, walked away from a proposal to commercialise CBH.

Mr Taylor, who now works for Glencore Grain, said it was chatter between farmers which initially sparked his interest in the topic.

His thesis, titled “Is a traditional service cooperative efficient and effective in a deregulated market? The case of Cooperative Bulk Handling”, formed the final part of his Bachelor of Commerce and Science degree at University of Western Australia.

“It grabbed my attention ... being influenced by my father and other farmers I had always agreed with what CBH was doing,” Mr Taylor said.

“I thought it would be an opportunity to look (at the issue) from the other side.

“The thesis wasn’t aimed to conclude anything certain, but to be written from a few different perspectives and as something farmers and CBH alike can read.”

The study raises questions about how CBH could be more cost-effective and suggests reducing the size of the 12-person board.

It also delves into whether smaller grain receival sites should remain open and whether CBH’s dwindling membership base is a concern.

Mr Taylor said the document also questioned CBH’s investments in global flour miller Interflour and Blue Lake Milling.

CBH released its financial results for 2015-16 last week, which showed profits in its part-owned company Interflour suffered an $8.1 million fall in profit, dropping from $8.4 million to $300,000, while Blue Lake Milling achieved a lower-than-expected $2.4 million profit.

CBH also spent $5 million on an in-depth review of its structure and governance after the AGC attempt to corporatise the company.

Mr Taylor said although the study was predominantly aimed at growers, it had also been circulated at CBH.

“CBH will tell them (farmers) a few things but it was more an easy read to give farmers an insight into what is happening,” he said. “CBH has read it, but I haven’t had an official response as of yet.”

The study cites high-level executives, including Wesfarmers managing director Richard Goyder, WAFarmers president Tony York, CBH group chairman Wally Newman, CBH chief financial officer Edward Kalajzic, CBH director Trevor Badger, AGC director Brad Jones and Bega Cheese chairman Barry Irvin.

Mr Taylor, who grew up on a 1100ha wheat farm at Tambellup, said he hoped to inspire other young people to study agriculture at university.

“I think it is growing in popularity — I think young people see a lot of confidence when you see Twiggy and Gina Rinehart invest in agriculture,” Mr Taylor said.

“I think it’sits sort of drawing a few people back into ag now ... it is becoming a lot more popular.”

To read the thesis, email tommytaylor63@gmail.com.

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