Fitzgibbon: Joyce CBH warning 'extraordinary'

The Agriculture Minister and new Deputy Prime Minister was quoted in media reports at the weekend cautioning CBH grower-shareholders against accepting the Australian Grain Champions (AGC) proposal and changing the current co-op structure.

“I tell you, don’t come screaming in my door asking me to retrospectively fix the problem after you’ve collected the money from it,” Mr Joyce was quoted as saying.

“Here is my salutary warning: if you turn into a corporatised entity and then sell, don’t come back and ask for special treatment.

“Once you have sold, we don’t help you any-more; you put the money in your pockets.”

But Mr Fitzgibbon said the minister’s statements were problematic; especially considering the co-op exemption granted in the wheat port access code, in this term of government.

“I thought they were extraordinary comments because the only interpretation you could put on them was this, from the Deputy Prime Minister of the country: ‘you will choose the corporate structure I prefer or you will get no assistance from this government’,” he said.

“His message is, ‘you do it the way I want you to do it or otherwise you get no assistance from this government’.

“So the Deputy Prime Minister of this country is now dictating to people, who might be starting a business, which sort of entity or corporate architecture they should use.

“That in my view is a first and it’s extraordinary.”

Mr Fitzgibbon said he believed CBH shareholders should be left to make their own decisions, in both the interests of the business and their own investment.

“It’s not for the Deputy Prime Minister of this country to tell people how to run their business,” he said.

Mr Fitzgibbon said if CBH demutualised they would lose the concession that Mr Joyce had extended to them in the wheat port access code.

“Barnaby Joyce should not be meddling in these business decisions – it’s not his role – and it begs the question; what assistance was he planning to provide CBH on the condition of the retention of the co-operative structure and what assistance is he threatening not to give?” he said.

“I can’t imagine what that is.

“There’s nothing inherently wrong with co-operatives; if people want to structure as a co-operative they’re very free to do that if they see tax advantages and other benefits and good on them.

“But when the Deputy Prime Minister and Agriculture Minister is threatening a business because it’s talking about moving to a structure which is not what he prefers, it is an extraordinary set of events.

“If - when I was Agriculture Minister - I said that, there would be a somewhat different reaction.”

WA Liberal MP and Katanning grain farmer and CBH shareholder Rick Wilson said he hoped Minister Joyce would treat the co-operative fairly and according to the rule of the land, regardless of his personal views.

“Barnaby Joyce is obviously a great supporter of the co-operative structure and obviously has strong personal views,” he said.

“If any changes to regulations surrounding CBH are needed, one assumes they’d happen regardless of what the minister’s personal opinion is.”

Mr Wilson said his initial reaction to the AGC offer was that it would struggle to convince growers and achieve the 75 per cent voted needed to publicly list CBH.

But he said grower-members should assess the offer on how it would affect their individual business and “try and take a bit of the emotion out of it”.

“There will be arguments around ‘co-operatives or bust’ but with competition it is a different world to when a previous offer was made in 2000,” he said.

“However it’s a decision for the CBH shareholders to make and I’m not going to express an opinion either way; other than to encourage people to have an objective look at the offer and make their own minds up.

“I’m a shareholder and will take my own advice and look at the offer from the perspective of my own business and make a decision which I’ll be keeping to myself.”

Mr Wilson said people were at different stages of their farming careers and some older ones may see the AGC offer as an opportunity to take some equity out of the company.

But he said he disagreed with the argument that suggested CBH’s value was built up by “our farming forefathers” given the 2000 offer to publicly list the co-op was valued at about $170 million and today’s offer was valued at about $3 billion.

“It’d be fair to say that a fair bit of the value has been created in the last 15-years so I don’t necessarily buy the argument that it’s about selling out the hard work of our forefathers,” he said.

“And also, there is commercial pressure coming on CBH with Bunge setting up an alternative supply chain and that to me is the insurance people have been looking for ; a pricing comparison that forces CBH to be competitive in the market or lose the business.”