The co-op that's creating new opportunities for Eyre Peninsula grain growers
Mining companies and farmers are frequently adversaries, with very different plans for the natural resources in a region. However, through the formation of a co-op, Eyre Peninsula Co-operative Bulk Handling, the relationship between local grain growers and mining company Iron Road is characterised by co-operation, open communication and a genuine desire to create mutually beneficial outcomes.
Agricultural journalist Michael Cavanagh talks to Tim Scholz, who is a farmer in the region, as well as director and chief executive officer of EPCBH and principal of stakeholder engagement with mining company Iron Road.
In this podcast you will learn:
- How local grain growers and a mining company are working together to find a win-win situation
- How the planned deep-water port at Cape Hardy could allow for grain and magnetite exports, and possibly even more
- Why co-ops give small farmers a voice
- How co-ops can empower them to collectively address sustainability challenges impacting their businesses and the wider community
Melina [00:00:02] Getting grain growers to work closely with the resource sector is not always a given. Hello, I’m Melina Morrison, CEO of the Business Council of Co-operatives and Mutuals, or BCCM. We’re taking a trip to the driest state in Australia, where on the Eyre Peninsula in South Australia, there’s such cooperation, which is providing a benefit to what has long been a history of grain production and also the resource sector. The BCCM’s podcast series Meet the Co-op Farmers has been taking a look at co-ops around the country, and this time Michael Kavanagh had a chat with Tim Scholz. He’s the managing director of the Eyre Peninsula Co-operative Bulk Handling.
Michael [00:00:46] Melina in nearly every business, whether it be the corner store or in primary production, consistency of supply always seems to be something not far from people’s minds. This came through in grower surveys over the past five years, carried out by Grain Producers South Australia. In its case, it was the thing such as storage, handling and also freight and export.
Melina [00:01:11] I could understand it would be frustrating for growers. So Michael, let’s hear from Tim Scholz and how not only are the grain growers in this area solving the problems through a co-op, but part of this involves the resource company, Adelaide based Iron Road Ltd.
Tim [00:01:42] The Eyre Peninsula essentially was opened up to white settlement, so Indigenous groups had been here, obviously for thousands of years. It was essentially opened up in two ways. The first was a pastoralists lease holding, which happened in the 1860s, and the area was occupied by a large pastoral leases with sheep. Essentially that the main agricultural institute plus for them, combination of the government of the day grazing lease rates and rabbits meant that that industry really estate by the 1890s and then the next agricultural wave occurred with the state pushing a railway line from Port Lincoln North right through the middle of the peninsula and ultimately right up to Sojourner. So in our case, that railway line arrived in around nineteen thirteen aged 19 13, and my maternal grandfather selected land in May 1914, was granted land or purchased land in 1914 and our district. And so as a railway line move north, they out for agriculture really occurred as that as that occurred, as that railway line made for there was a peninsula has no natural water and then right down the bottom where there are underground catchments. And so for the early settlers, water was provided also by the tribe and each siting used to get its quota. And my mother used to tell me that generally they were tallow and tanks, and often they’d like. But whatever was your area’s quota, that’s what you got. It was empty bed like you waited till the next time. So water was provided north in the early 20s so that 10 years later and agriculture is predominantly dryland agriculture. It was mixed as probably now running 80 per cent and 20 per cent shaped cattle.
Michael [00:03:42] And in the primary industry sector, that’s as you say, the basis of it. There is one water based agriculture economy, and that is there’s aquaculture as well.
Tim [00:03:52] Yes. So that originally the porn industry started up in Port Lincoln, had been fishing for a long time around the coastal areas and really good fishing prawns came into being in the 50s and then tuna followed. And since then, you know, the coal port Lincoln, the seafood capital of Australia. So there are oysters, abalone, they’re farmed. Tuna is wild, caught and then farmed, and kingfish now farmed. So it’s a it’s a very big industry on the coast.
Michael [00:04:30] And the other aspect and the rail and the expansion of rail would have certainly influenced that. And that’s mining as well.
Tim [00:04:39] That we really had little impact on mining, so the rail system on the peninsula was a closed system as narrow gauge. And it was just really built as a way of opening up the country. And of course, if you put that in today’s context, that would have never happened. Because of its native vegetation, a lot of native vegetation had to be cleared. The mining occurs outside has occurred around the Whyalla region related to iron ore, and that has its own rail system that runs into Whyalla but doesn’t connect to the rest of the peninsula. So it is effectively cut off except by road and links
Michael [00:05:20] well with cereal in particular. Being a dominant part of the primary sector for the Eyre Peninsula. The Co-operative itself? What was the genesis behind that?
Tim [00:05:32] So the genesis behind the company, I’ve been involved, obviously in agri politics through the 80s and 90s predominantly came back as it were home and got involved in local government politics. The third tier of government and as a community, we had our mining company did some serious investigations around brownfield deposit that had been identified in the 1960s. There’s a company called Iron Road, and since they first arrived in 2008, that company has spent better than $160 million developing a magnetite deposit, which is right in the centre of Eyre Peninsula. That resource is about four point five billion tonnes of magnetite, but it’s in an area where there is, in fact, no historical mining industry and mining records. So for any mines to develop, it has to pick up every piece of infrastructure you can find, which is port, water, power rail and everything. So the company had developed that as a prospect and still has as a prospect that’s now listed in in priority, probably in the top five or six deposits in the world. But that’s yet to be the build of that project. That’s yet to commence and that’s subject to partners and funding as most of these deposits are. So I was mayor of my community when that mining company arrived, and we as a community through the council, made a decision that if the deposit was good enough, it would be mined. And the best way forward for the community was to work out how to maximise value around the mining operation. So from accounts point of view, we did a lot of work in making sure that if there was any development in relation to workforce that it wasn’t on Clive, that it was integrated into the community, so that planning has been done quite extensively. Then in 2013, I actually relinquished my position in council and joined the mining company as the principal was a stakeholder engagement from my view that was really to make sure that if the mining company was going to develop that mine, that we had as much say as possible as a community. And also the mining company had said they wanted to be long term community members. And and I saw my role as assisting the company understand the culture and also assisting the community to try to get to grips with what the mining company could bring. So that mining project had both mine operations needed to export, and there are no export ports on the peninsula to handle that volume from the iron ore. And so it seemed obvious that given that we were in a situation where in South Australia there was an absolute monopoly on grain and infrastructure that was, they also say BHP Ibe been taken over by Artura, and that was a very strong view generally of farmers that we were being held hostage with only one option. In fact, one option is no option at all is what is. And so this seems an opportunity for the mining company and for agriculture to decide that if there were new port facilities available, then agriculture should be around the table. Obviously, I’ve been talking with a lot of a lot of farmers across the journey. We put together a workshop of interested farmers and that workshop decided that yes, we there was an opportunity here. We wanted to be involved and we chose a co-operative as the model, a structural model to take that forward.
Michael [00:09:35] Until then, just almost being held hostage. About where you could, first of all, transport your grain to and then how that was distributed. You got together with the community, you came up. Why the co-op itself?
Tim [00:09:50] So if you go back to the history of the South Australian corporate bulk handling and the various evolutions of that process back in the 80s, in the 1990s through 2000, where confidence fell from favour with governments, generally, you know, it was, Oh, you can’t fund them, you can’t get equity. The old school that culminated in the sale or the loss of Associate CBH, it morphed into a baby. But then ultimately there was a sale. Eyre Peninsula farmers. Generally, we were part of that process, but we produced a lot of grain. But the numbers are quite small because the farms are quite large. And even though essentially you could say we lost the vote. So even though that was sold and finished, the farmers were involved in that. There was a significant dissatisfaction with the process, which we could do nothing about. So when we talk through the various structures, it is a very clear message from those founding members that we didn’t want to go down a process and and be corporatized and or sold out down the track if we’re going to go on this journey. We wanted it, wanted it to be a. A long view, long outcome, and it was actually interesting, I was talking to some of the companies that we that we are talking with in the process. Your question comes up as as to what farmers want out of, but we want a multi-generational development. If it’s going to happen and be successful, we want that to be for multiple generations. And we had the comment. Oh yes, but we’ve got a long term view. Or what is your long term view, seven to 10 years? You know, I have six hundred years of farming history around my board table. And that is the difference.
Michael [00:11:50] It’s a big difference. Yes, you say they’re large farms, small number of farmers. As I understand it, when you started in 2017, there were 12 farmers involved. What was the structure and the financing?
Tim [00:12:06] Look, the structure and financing we would not have got on board without the help of the funding to get the programme. So everybody kicked in a little bit of money. Now, luckily for the cooperative, the mining company had given me carte blanche to work because I had said, Look, farmers need skin in the game and I think there’s a way to do it. And I had given a free rein to work while being paid by on road. In that instance. So that’s still the case today. I’m partial employed by road, so I’m still principal advisor stakeholder engagement with on road. But they have helped immeasurably with with the running around and the buy stuff that you need to do to develop a company. And we have had strong support from the first Farming Together programme and the second Farming Together programme. And so we’ve had really good federal government support, effectively having been able to jargony support from the state government. But we live in hope in relation to that. So it’s been a low cost. All our boards, voluntary stewardship, they’re passionate and it’s a matter of establishing some milestones and saying if we do not close over one by one, but understanding this is a it’s a marathon, not a sprint.
Michael [00:13:26] And the share in the cooperative itself, the farmer who wants to be a member puts up understand it was $1000 each. Does that give you one vote or can you buy more than that initial $1000?
Tim [00:13:41] No, we’re absolutely traditional companies, so there’s a thousand dollars for the joining fee and then farmers were required to buy 200 shares. And so that’s been the case, and we’ve actually grown to about 138 farm businesses, which comprises probably close to 200 and 70 farm families. But it is one membership, one vote regardless. So at the moment, we only have had two chairs allocated. We have had a capital raise using a couple of capital units, which is being, you know, is voluntary take up. But the principle of of one membership, one vote for the copy of is essential. And so we have farmers who probably produce in excess of 25000 tonne of grain and other farmers that are probably struggling to produce the thousands. The fifth 15 have the time of prime. And that’s one of the key principles of the company is that people, people will actually want.
Michael [00:14:44] Tim the Co-operative itself, it’s made up on the Eyre Peninsula, but if you’re a grain grower elsewhere in South Australia and you want to be a part of that grain being exported through The Co-operative, is that open to a farmer from another part of the state?
Tim [00:15:02] It’s restricted by activity, which is growing grain. Of course, we’re not in the stage where that element of the company, if we have to be too sanctimonious about because we’re actually still in start up development mode. But what we’re talking about is really export facilities on Eyre Peninsula. Firstly, but if there are other people that wanted to, it’d be no barrier providing your grain grower. In addition, with a couple of Carrefour units, you know, we have had a first issue of those and we’ve had some non agricultural backers and take up those issues, which has been very important. And also, we’re open to the calculator evolving or being subsets of the capital because there are other opportunities opening up to us or being offered to us. And we’re trying to work out how, how we how we take advantage of that without losing sight of the of the main goal, which is the development of alternate export facilities so that farmers actually have modest and like eventually substantial ownership in the farm gate chips whole business.
Michael [00:16:10] Farmers are always turners, the supreme optimists. And when you start this up, you’re in the grip of a drought. Did you sometimes see what are we doing many times?
Tim [00:16:21] And I think around the board table, we probably do that regularly. What are we doing? So from the start up, the first elements that happen, if you like the first milestone was the companies the agreed or developed a memorandum of understanding with on road the mining company. And that’s to work together in the event of the port being developed, which is the location of Kaipara. And since that time, you know, we’ve achieved a number of things. One has been obviously an increased membership, with those members being made very aware that this is set up and developmental and there is no guarantee of success. So it was high risk for them to be a member and to be a shareholder. But we’ve managed to grow our membership and along the way, this started to pick up and build out the relationships with other industry groups that have interests on the peninsula and potentially providing opportunities for agriculture on a peninsula. So it’s a matter of ticking along. We still have a good, very good relationship with Island Road, and the default position of what we’re trying to do is that that mine goes ahead. The port is built and then grind becomes one of the multi commodity elements of that port.
Michael [00:17:45] I’m Michael Cabinet. I’m talking to the CEO of the Eyre Peninsula cooperative bulk handling, Tim Scott, who is a farmer in the area itself. Tim, you mentioned how there are non agriculture interests that have been showing interest in the kelp itself. Does companies like Iron Road in the mining industry? Be a part of that, Culp, as well as shareholders
Tim [00:18:12] on this as a shareholder, they would not be able to fulfil the activity component, which is being an actual grain grower. However, they have shown obviously strong interest in supporting me in my role. But along the journey we caught quite very early on, we came into contact with people that were involved in the development of the new renewable so hydrogen ammonia industries. And one of those companies is a company called H2 U, which has had a lot of interest on our peninsula since 2017 18 and currently has a major project, the Port Bonighton, which is around the port around the Whyalla area. And it might say, well, what relationship does that have with agriculture? Of course, they’re interested in the port, so a deepwater port AK Party has a good location and they have their project pipelines while they’re focussed on at the moment, Gladstone in Queensland and Port United in South Australia. They have a pipeline of projects that develop, and Kaipara has huge potential because it is a 20 metre plus deepwater port. The will not require dredging that is absolutely unique in Australia, and it’s in an area where it would be a greenfield port without a huge population base around it. Now people say, well, it’s a that creates problems that creates huge opportunities for industry because both the ports the world have, populations in the cities have grown up around the ports because that’s where the trade happened. And then all of a sudden you try your compromise and if you’re trying to shoehorn industry into existing population bases. And so with the green ammonia industry, with the green hydrogen industry, it is to its advantage to have plenty of space and not to be constrained by all the issues that that trying to do that either on the fringe of the city or outlying to a city. So I wrote itself has let 100 hectares port site, whereas farmers have and it’s been one of the things we’ve done as a captive with actually purchased a pretty strategic site which abuts up to on road port land on two sides of some 160 hectares. So we have been talking with with HQ for some time and in fact, we completed a memorandum of understanding with H2 about three or four months ago, and that’s predicated on the development of the green ammonia or hydrogen industry. And you know, the H.S. process produces green ammonia, which is ammonia that doesn’t have any carbon in the chain. And that green ammonia certainly is sought after. It will be sought after globally to reduce carbon emissions so it can be used in the electricity production industry. And potentially, Japan is talking about adding green ammonia to its coal fired power stations as a native feed with a consequent reduction in carbon. But green ammonia, mostly ammonia, we use 50 percent of the world’s fertilisers ammonia based, and that all comes out of coal seam gas or the fossil fuel industry. So there’s huge opportunity to replace that with green ammonia, because then that draws down the carbon footprint of agriculture. So maybe the connexion is a bit but vague at this stage, but the potential to be involved and have a place at the table around green ammonia production and then to bring that back into agriculture, either as fertiliser. Well, ultimately, as using ammonia as a carrier for hydrogen, which is what it is back into some of the transport logistics, that same opportunity we couldn’t ignore. So we’re heavily involved with that group as well.
Michael [00:22:20] You go around the rest of the country where mining and farming is occurring is the inevitable tensions particularly thick in New South Wales and the Hunter Valley region. And going further north in the rich, fertile area of Liverpool Plains, this one you seem to be working very closely, not just with the use of the port, but also research and what have you. How have you overcome or avoided those inevitable tensions between the mining industry and the farmers of the peninsula who’ve been there a long time?
Tim [00:22:51] You can’t remove the tension. You can’t paper over the tension. The tension will be there and ongoing. That’s really how you manage that. And so what we’ve tried to do from an on road perspective is to make sure that the company is always available. It’s transparent and what it does, and it doesn’t change its mind. So one of the things that interested me when I joined on board was to assist the company to get an understanding that their furniture is out. They ultimately connected locations. So. Up and down the peninsula, people, they played sport with each other or married each other, etc. And so I joke to them and said, Look, if you say something in Port Lincoln, it will be at Ceduna faster than the speed of light. So the company, I think, has come to understand that, and it’s not yet overpowering opposition. It’s about being respectful and listening to it, but also continually trying to present what diversity could do for the peninsula. What that means, and in fact, is that the people who are affected by the mine site itself, for some of us, that will, but that’s life changing and some have a great deal of difficulty with that. Likewise, in the mine project, there was a transport corridor or logistics corridor between the mine and the port. Now that affects about 45 landholders with initially in the first iteration of the mine, it was a rail line. Currently, it’s a whole road cross property. So for some of those people, do you ever get to where they say, Yes, we’re comfortable with this. Maybe, maybe not. But what we’ve been able to do is sit down and discuss with those people and find ways to lessen the impact. We’ll find other opportunities that they might get as a result of being a landholder in the corridor. That’s fair to say that, you know, with the cops had discussions with IRA about use of that whole road if and when it’s built. And we’ll continue those discussions going. So there’s some opportunities in that space. So yes, it’s it’s difficult. And there’s been questions asked for the copy of why you’re getting into bed with the mining company. It’s not exactly getting into bed with the mining company, but. What’s the mining company does is offer an opportunity and a genuine opportunity to agriculture because the mining company also need the goodwill of the community. So the company is trialling two ways we believe we can bring value and competitiveness on a significant scale for a long time to agriculture. The diversity that mining can provide, you know, can bring skill set in, can provide skilled work opportunities because, like most rural communities, our biggest export has been for the last 20 years has been people the last 30 years, and like many regions around with denuded of skills and of people, today the skills. So, you know, maybe it’s pie in the sky. Maybe it’s a bit of dreaming, but I’m sure as hell if you sit back and just complain about it, nothing will ever change. So cups away, we say of being in that space and working collectively to get better outcomes for us, but also provide an opportunity for the mining company to do what they’ve said they’ll do, and that’s become an integrated part of the community for the long term.
Michael [00:26:35] Co-ops are very much attuned to the community, and cops sometimes provide funding to community groups or scholarships to try to keep people to stay in the region, or they turn the money back into the shareholders for your co-op. What happens to the surplus?
Tim [00:26:57] We love to be in that position, and certainly we take the principles of the carpenters very seriously. So we would we would love to be to get into such a state that we could provide community programmes with community support. The surplus certainly would go back to its members, but it’s what proportions of the surplus and what. What do you do as good a responsible community citizens as a culprit. And so that’s certainly in everybody’s mind. We we don’t spend too much time thinking about that because that’s an elusive dream at the moment. We really just have to continue to survive and hit milestones and continue to build relationships with the groups that can help us get there. I guess one of the one of the big issues that we find as a company that will describe itself as a relationship based organisation. And while a lot of other groups claim that when you really get into the nitty gritty, as soon end up back in transactional based culture and so matching a relationship based organisation that has to be transactional to be successful at matching that as a core value compared to a group that really is about the bottom line and the return to their their owners. That’s the difficulty that you only work your way through this trial and error. There’s no rulebook. There’s no easy way to do that. So what we’ve tended to build relationships and some we’ve done that with HQ and there’s a couple of other groups that we have the or to have in my years, and that’s really been based around the relationship of what we want to achieve. And firstly, then how can we put that into some sort of transactional arrangement that that enables that that’s very much work in progress.
Michael [00:28:54] As I understand it, around 94 per cent of the crops that are grown on the Eyre Peninsula exported. Does that mean that the Co-op? The grain gets taken down to the deep water port and off it goes, or are you getting also involved in the marketing of the grain of the area, whether it be into Asia, a major market Europe or even that small amount back into Australia?
Tim [00:29:21] Look at initially, conceptually from a company point of view, it’s about logistics and handling. And the reason for that is that given our size and start up basis, the idea that we could conceivably make a difference in the first period by marketing grain was a task to had a go too far. A lot of the major grain exporters around the world regularly both run surpluses but also burn money and some years and aboard felt right. From day one, we thought, yes, it would be great. But when you actually look at the practicalities of that, that’s a really, really dangerous guide to be in. And so we’ve firmly focussed on the logistics and handling. Having said that, we’re building relationships. So. So one of the key elements of that of a grain politologue capability of grain going out of capability was that we wanted to work with grain traders next folders, but we wanted that port to be transparent so that. Whoever wants to buy grain from our farm sector knows that they have every chance of getting appropriate shipping slots, and so they’re on an equal basis across the board from a from a grain trader perspective. And when we’ve talked to grain exporters, we said, Well, this is fundamental to us. We want to help provide a platform that will enable you, if you’re an exporter, to put your best case forward and win the grain based on your service and what you provide and not be trying to do that with one hand tied behind your back because you have limited opportunities to use the export trade. So that’s been pretty fundamental with what would happen going forward is you’ve also said we’re more than open to developing relationships, either with end users and with the traders. As long as that, that key understanding happens. And we’re seeing that and there is a lot of interest out there, a lot of interest watching the carp saying, Well, if you’re successful, we want to be tortured, you want to be doing business with you. And of course, we’re in this classic Catch 22 situation of knowing the price, but still not having a clear pathway to get there, necessarily.
Michael [00:31:50] Tim, does the cowboy also provide expertise such as bringing an agronomist to work with the farmers at different times of the season?
Tim [00:31:59] No, that’s that’s yeah. A lot of the American Cups certainly have that their size and their status at the moment that precludes that. Having said that, some of our members working as agronomists on the peninsula, so they work under the current either either as individuals in their own businesses or for some of the other companies. So we’re pretty well serviced in that sector across AP. So it’s not an area with we’ve even considered at this point in time.
Michael [00:32:35] Tim Schultz is my guest today. He’s the CEO of the Eyre Peninsula, Co-operative bulk handling and a farmer himself. I’m Michael Cabinet. Tim, you made mention numerous times about indigenous presence on the Eyre Peninsula. What’s the carp doing in relation to not just ensuring that there’s cultural sensitivity, but also possibly in a business sense as well?
Tim [00:33:02] Yes, I Rudd has successfully completed that Illawarra with the Bangalore nation and the Bangalore tribal owners of certainly eastern portion of the peninsula, where we’re mostly concentrated. So On Road has had a good working relationship, but with a Bangalore for many years, I’ve been part of that process and also in my own personal space. You know, I’ve been to school on college with a number of indigenous mates and digital friends, so we’ve always had an awareness of that space over the journey with also developed relationship with indigenous business, and we also reached agreement with local mining and services. That’s an indigenous owned business that operates in the iron ore trade out of Whyalla. The chief contractor it on know quite a big business, so we’ve actually concluded a memorandum of understanding with local mining and services that’s really about working cooperatively together. In the business development area around capacity, so they also want to be involved and want to be part of the process. And this is why we felt that if there’s opportunities that. We can jointly work together. First step is formally acknowledge that in a memorandum of understanding, so that’s a really good relationship and we have been working with world again for is less as long as you or possibly longer. That’s really interesting development and we’ll we’ll wait and see where that goes. Quite a few ideas in mind in that space. It’s interesting from a cognitive point of view that our farmers are focussed on getting more opportunity, more competitive, the sins of the brain system. And so we’re very conscious that we don’t want to be sidetracked into into other things that take us away from that focus, but particularly now having a land based capability to enhance the potential for the grain business to succeed. It’s obvious that there are other businesses that want to join the journey with us. And while we’re is one of those groups,
Michael [00:35:26] do you also find that possibly being a community based organisation, there’s greater trust between yourselves and the indigenous communities, as opposed to them seeing larger corporations coming in?
Tim [00:35:40] I’d like to think that that is the case and certainly where we are there and present always in the community. And again, you know, most of their guys have been guys and goes by that farm. Families have been on the land a long time. Eyre Peninsula is characterised by most of the families that remain the survivors of a long history of drought because it’s a pretty tough place to farm, particularly from about halfway up where I am, you know? Yeah, there’s some pretty been some pretty hard times in the past, and you can see that the grain production, which averages around two and a half million tonne per annum, has a high of 3.4 million tonne, a low of 900000 tonne. So there’s big variation in production. So, yeah, there are new farmers coming into the region, probably attracted by lower land prices, although everything seems to be on the move up front at the moment. But moving away from that, it’s a hard place to farm as hard place to survive. And so agriculture has a strong connexion to the land. The bungle the traditional owners have thousands of years connexion to to the land, and hopefully there’s some synergies with that
Michael [00:37:01] now, given that it is a very tough area to farm and you’ve got a small number of members. And yet there is expensive infrastructure and it does come to grain handling as a co-op. Have you gone about dealing with financial institutions when you have needed to go cap in hand for some money?
Tim [00:37:24] We’re in that space at the moment and it’s really difficult because it’s the history of the organisation. We have been working on a joint venture with Ion Road Limited and Macquarie Capital. That’s around the port. We’re probably in a in a stone situation at the moment because, you know, some of the key elements that the farmers want to bring to that relationship. Probably haven’t been agreed by the other parties and vice versa, so that’s a work in progress. But having said that, we are still working in our own right to copy of and that’s about making some relationships, including with the financial institutions and some other groups that see merit. The classic problem being that if you look at what we want to do on a straight transactional basis and the sort of rewards that institutions want from a farming perspective, we think that probably can’t be delivered in a grain only operation, which is why farmers wanted to align with iron, right? And for that to be multi commodity so that the burden is actually shared by other industries and that’s still our default position, is that on road project goes ahead and agriculture becomes part of that. We’ve been working on a great first project that is still potentially possible, but there’s quite a bit more work to do in that space. So that’s a yeah. I’m going all the way on the subject without answering, I guess in a sense, but yeah, there’s no magic beans there. I guess it’s an area that if governments collectively of whatever colour believes that the company of movement has something to offer as an alternative structure. And I think cooperative movement and companies in general have a huge amount to offer communities where services are being withdrawn. If we go to the American expense, you know it was the depression. ERA that saw the great rise of that, particularly the electricity companies in America where governments had defaulted and said, No, no, we don’t want to be involved in that. And look, we’re approaching that in rural Australia and not just in our case, it’s agriculture, but you could talk about health. The classic of a great rural community that can attract doctors, and everybody talks about the problem. Everybody complains about the problem and governments say we’re doing a hell of a lot and nothing changes. So the whole area, a group of areas, both commercial and social, where copies potentially have a place. But given that they don’t fit in this financial reward process of the corporate world and the private enterprise world, then it would seem to me that there could be a great role for government to to assist. Certainly, capital attraction and putting in place some capital instruments that the companies that have done the hard yards got good players and Good Place can actually go to. If that was the case, then that would also increase the attractiveness of those companies to the commercial. Well, I think that’s a big area that is still too soon to play out and hopefully the basis, for instance, continues to work hard in that space. I don’t sense that governments have really grasped. Having said that, the federal, the last federal government or the last federal governments have probably done more in this space than anybody in the last 20 years. But but I think there is some great opportunities out there just begging for some understanding and some and some real grabbing observations.
Michael [00:41:16] There’s the danger possibly of a distraction there at the same time that you’ve got your farmers who are primarily there to produce grain and to export that as the co-operative becomes more entrenched on the peninsula and you’re talking about other services and you juggle the two.
Tim [00:41:33] I don’t think you juggle the two. So I guess what I’ll be saying is that there would be other other companies and some I’m not talking about expansion of Las Vegas things to all people, but rather saying the model, I think, can can certainly be expanded and and groups of people with life interests can possibly utilise the copy of model going forward. So, so one of the key things for us to keep focussed on is, in fact, what is there? What is the mind game is what we’re there for. And while we have another of other things happening and I don’t think there’s a board meeting where we don’t go back. So what’s what’s the basis for what we’re on about?
Michael [00:42:21] Business Council of Cooperatives and Mutuals today is on the Eyre Peninsula and talking to Tim Schultz, who is the CEO of the Peninsula Co-operative Bulk handling a farm himself. Tim. The issue of climate change, global warming and you’re in a very dry area as it is already. You’ve got yourself involved in that as well with such things as a video of Paddy Farm under a warming climate warming farm. What’s prompted, then?
Tim [00:42:55] A look that was done that wasn’t done with my bank captaincy that was done with maybe just an individual farmer and probably my local government connexions. But obviously, if nature is one of those locations that can potentially and probably is already potentially being affected with changes to winter rainfall patterns, suggesting that as a local council wouldn’t the local council. We had a conference about 10 years ago and our keynote speaker was actually more than 10 years ago. Now, probably 12 or 13 years ago, a keynote speaker for that conference of all councils on so was Professor Will Steffen. So he’s well known in the climate change, and he kind of gave absolutely riveting presentation. I think half the people there thought, you know, what on earth are we doing listening to this? But yeah, as events have unfolded, it’s been pretty spot on. So from climate change perspective, it’s about agricultural modifying its approach and learning to live with climate change. And and while we will say differing winter rainfall patterns. Certainly, we potentially will say different summer rainfall patterns, and so what is and what is, I guess, evolved as farmers try to conserve every drop of rain that falls regardless of where it falls around the year. But having said that, where where the cooperative potentially has a place and this gets back to low carbon farming. The premise of green ammonia or hydrogen of green ammonia production is the splitting of water to produce hydrogen and oxygen and then ammonia. And of course, that requires immense amounts of pen. If there is any carbon involved in the electricity that drives those operations, then it’s not green, say the blue or brown or whatever. So one of the reasons why I finished has looked at as a place for significant haj and ammonia production is that it has extremely good wind resources and obviously it’s a hot, dry place. And for production units to be developed on Eyre Peninsula, they need a big source of power. And the connexion we made with H two years was, well, you know, we’re looking at wind power and solar power, have a guest who owns the land and it’s in fact fast. It’s alive the land that people want to put wind turbines on predominantly and solar panels. So rather than again, farmers sitting back and just waiting for somebody to ride over here on off on this super deal, and they just know a salesman that this solves all the problems. It made sense to talk with HQ and say, Look. Let’s work with farmers so interested in this space as opposed to trying to do it in a disruptive manner. So part of of a memorandum of understanding to use this effect to look at the establishing a database of resources available on average to farmers who are willing to be involved in that and just saying where that where that takes us. We’re already seeing that in areas of New South Wales, where it’s a farmer puts a portion of his land into the solar panels and we have protectively predicting that operation. I’m not one that wants to say a whole landscape covered in reflective glass. But having said that, if ammonia and hydrogen are the gold, that is going to be one of the outcomes we will say. So then how do you put that in agricultural landscape? Manage it so that it doesn’t become an issue in its own right? In fact, maybe we’ve got to start thinking about solar being predominantly in the more marginal lands when resources are where they are. But then maybe the solar panels need to be of such that you can graze livestock. In a sense, that’s happening certainly overseas. So the whole area, then how does that relate to grain? Well, it does, because also at the same time, we’re seeing companies around the world wanting farmers to basically be able to order the carbon usage. So we’re saying CBH in Western Australia, putting money into identifying low carb and grain production. So again, if you join the dots, they’re bit obscure. But this is all about us as farmers and with the carb ban, they reduce their supply chain costs, but also remain relevant in whatever way the world continues to involve, both with marketing our grain, but also in reducing our carbon footprint from our inputs. That gets the game back to the green ammonia for fertiliser, potentially hydrogen trucks, for instance, there are hydrogen hybrid tractors now on sale in Europe, and some of the major manufacturers are doing a lot of research in things like fuel. So pad harvest harvesting, so that is the will be going into online sale by time. But that is the will be going into. And it made sense that people thought a group of farmers wanting to collectively work in this space was valuable. Well, then we should take the opportunity to be there for itself, and that’s what’s happening.
Michael [00:48:21] It certainly changes the image of a co-op, particularly in the traditional area of farming with cropping and cereal, which you now looking at such things as green ammonia and you’re looking at also going further into energy. Did you envisage when you were growing up that possibly that would be the way that co-ops would be going and particularly on the Eyre Peninsula?
Tim [00:48:46] No, not in the slightest. I suppose in some summing up energy, I think I’ve said that there’s no competition. This is absolutely no different. We farm say we we use, we use renewable energy to grow our crops and take the lead in the river and the sunshine to produce grain. And at the same time, we have all this light and energy that falls on our land every day, a living window or sun. And we have the land. So really, this is just another form of farming. We actually wanted to turn that light and energy into ultimately a revenue stream to support the energy that goes into production of will make beef, whatever actual farm produce we’re currently doing. It’s just never now the usage of the same energy.
Michael [00:49:39] Tim Schultz is the CEO of the Eyre Peninsula cooperative bulk handling. He’s been my guest today. Tim, it’s been great hearing about how a traditional part of farming is getting very involved in other areas through its calm.
Tim [00:49:54] Thanks, Michael. Thanks for the opportunity.
Melina [00:49:57] Tim Scholz, managing director of Eyre Peninsula Co-operative Bulk Handling. Michael, this is cooperation between a co-op and a mining company, as heard in this podcast in the series of Meet the Co-op Farmers.
Michael [00:50:12] And Melina looking at a future podcast, there’s often the view by some that they wish they had. shares in the local pub. Well, in the case of one Victorian town that’s exactly what some of the residents have done, and it’s all through a co-op that’s coming up in a future podcast.
Melina [00:50:27] I hope you enjoyed this latest episode of Meet the Co-op Farmers. If you’d like to know anything about setting up or running a successful agricultural co-operative, you can find out everything you need to know at the Co-op Farming website that’s www.coofarming.coop that’s right, coop for co-operative. Please share this with your mates if you enjoyed this story, we really do want to get the great stories of farming cooperation out there. And remember in a troubled world with all of the challenges, but also the opportunities we have, we really are better together. I’m Melina Morrison and I look forward to seeing you on the next episode of Meet the Co-op Farmers.
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