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THE DEMOCRACY PRINCI P LE FARMER CO-O P ERA T IVES IN TWEN T IE T H CEN T URY AUS T RALIA GARY LEWIS THE DEMOCRACY PRINCI P LE FARMER CO-O P ERA T IVES IN TWEN T IE T H CEN T URY AUS T RALIA | I | Hugh Kirland’s property near Booyong just outside of Lismore. Getting ready for milking (early 1900s) Photo courtesy of Norco Co-operative Limited. | II | THE DEMOCRACY PRINCI P LE FARMER CO-O P ERA T IVES IN TWEN T IE T H CEN T URY AUS T RALIA Gary Lewis | III | The Democracy Principle: Farmer Co-operatives in Twentieth Century Australia is published by the author, Gary Lewis of Wamboin, NSW, under the auspices of the Co-operative Federation of NSW Ltd. Funding for printing was provided by the New South Wales Registry of Co-operatives and Associations Co-operatives Development Grants Program. Text copyright © Gary Lewis 2006 The moral right of the author has been asserted. All rights reserved. Without limiting the rights under copyright reserved above, no part of this publication may be reproduced, stored in or introduced into a retrieval system or transmitted in any form or by any means (electronic, mechanical, photocopying, recording, or otherwise) without the prior written permission of the copyright owner, who is the above publisher of this book. ISBN 0-646-46587-2 Cover and book design by The Magic Lantern Company, Melbourne Typeset by The Magic Lantern Company, Melbourne Printed by BPA Print Group, Melbourne | IV | FOR CA T HY | V | Contents THE DEMOCRACY PRINCI P LE FARMER CO-O P ERA T IVES IN TWEN T IE T H CEN T URY AUS T RALIA Acknowledgements (VIII) Abbreviations (IX) Foreword (XIII) Preface (XV) Part I: DAIRY Chapter One (3) THE NEW SOU T H WALE S And VIC T ORIA N DAIRY CO-OPERA T I V E MO V E M E nts TO WORL D WAR ON E Chapter Two (27) A March Of Regulation: FAR M ER CO-OPERA T I V E S IN THE Int ER -WAR YEAR S Chapter Three (45) ‘It Is Time To Deregulate The Sacred Dairy Cow’: THE PO st -WAR DAIRY CO-OPERA T I V E MO V E M E nt Part II: ST A T E S Chapter Four (69) The South Australian Co-operative Movement: AN OU T LI N E Chapter Five (81) The Queensland Co-operative Movement: AN OU T LI N E Chapter Six (95) ‘Democracy Tomorrow’: THE WE st ER N AU st RALIA N CO-OPERA T I V E MO V E M E nt Chapter Seven (129) ‘Is Anyone Out There?’ THE VIC T ORIA N CO-OPERA T I V E MO V E M E nt 1944–2000 Chapter Eight (147) A Movement Adrift: NEW SOU T H WALE S CO-OPERA T I V E DE V ELOP M E nt 1944–C1987 Chapter Nine (163) ‘Co-ops 2000’: NEW SOU T H WALE S CO-OPERA T I V E DE V ELOP M E N T 1988–C2000 | VI | Part III: NA T IO N AL Chapter Ten (209) The Producers And Consumers Cannot Co-operate: THE CO-OPERA T I V E FE D ERA T IO N OF AU st RALIA 1943–C1985 Chapter Eleven (235) CO M PE T I T IO N , DEREGULA T IO N And THE ‘CO-OPERA T I V E DILE mm A ’ Chapter Twelve (243) ‘More Than Making Money’: CO-OPERA T I V E S SEEK NA T IO N AL UN I T Y 1986–1996 Chapter Thirteen (265) ‘Let’s Co-operate’: CO-OPERA T I V E S And THE ST OCK EXCHA N GE IN AN AGE OF DE M U T UALI S A T IO N Chapter Fourteen (279) A Colonial Relic: SEEKI N G UN I F OR M CO-OPERA T I V E S ’ LEGI S LA T IO N 1985–2000 Part IV: CA S E ST U D Y – THE DAIRY FAR M ER S ’ GROUP Chapter Fifteen (307) ‘Dry’ Shareholders, Deregulation And Capital Adequacy: THE DAIRY FAR M ER S ’ CO-OPERA T I V E TO 1993 Chapter Sixteen (329) ‘Hazy Horizons’: THE DAIRY FAR M ER S ’ GROUP A nd ‘PAR T IAL ’ DE M U T UALI S A T IO N 1993–2004 Part V: OV ER V IEW Chapter Seventeen (361) ‘Missing In Action’: FAR M ER CO-OPERA T I V E S IN TWEE nt I T H CE nt URY AU st RALIA Appendices Appendix One (373) AU st RALIA N CO-OPERA T I V E And TAXA T IO N : AN HI st ORICAL OU T LI N E Appendix Two (385) THE ‘HOLY GRAIL’ OF AU st RALIA N CO-OPERA T IO N : A CO-OPERA T I V E BA N K Notes (389) Index (429) | VII | Acknowledgements Largely self-funded, The Democracy Principle has been written independently of tertiary institutional support. Periodic employment or consultancy over many years in the co-operative sector allowed work to proceed. In this regard special mention should be made of the New South Wales Registry of Co-operative Societies Co-operative Development Branch, Ricegrowers’ Co-operative Limited, Credit Union Services Corporation (Australia) Limited, the Australia-Pacific Co-operative Training Centre, National Co-op Update, the Australian Centre for Co-operatives Research and Development (ACCORD) and Gateway Credit Union Ltd. The help and encouragement of many colleagues is gratefully acknowledged, in particular Garry Cronan, Bruce Freeman, Ray Ison, Tim Dyce, Tony Gill, Chris Greenwood, Lawrie Dooley, Wayne Ryan, Race Matthews, Jill Jordan, Anthony Esposito and the late Bill Rawlinson, Kevin Yates and John Gill. Garry’s abiding belief in the practical value of co-operatives’ history helped sustain the motivation over many years. Thanks also to Geoffrey Bartlett of the Australian National University History Department (retired) for his unwavering belief in the research and to the National Library of Australia Oral History Department, the (former) Co-operative Federation of Australia, the Co-operative Federation of Victoria and the Co-operative Federation of Western Australia for their support at key moments. The kind assistance of Norco Co-operative Limited, Nambucca River Co-operative, Bega Co-operative Society Limited, Murray-Goulburn Co-operative Company Limited, Australian Co- operative Foods Limited, Co-operative Bulk Handling and the Battye Library, Perth, Western Australia in making photographs available for use in the book is greatly appreciated. The photographs are arranged more or less randomly and add an interesting historical flavour to the book. Special thanks to the Board of the Co-operative Federation of NSW Ltd and in particular, Executive Officer Helen McCall, for graciously sponsoring an application to fund the printing of this book and for their assistance and efforts in bringing it to print readiness. Without the generous support of the New South Wales Registry of Co-operatives and Associations Co-operatives Development Grants Program, which provided funding to print this book, it simply would not exist. I am greatly indebted to the Registry and its officers. Nothing would have been possible without the sterling efforts of Maureen Clarkson, who worked above and beyond the call of duty to word-process and manage the development of a large and complex manuscript – my deepest appreciation, again, Maureen. Finally, without my wife’s patience and understanding through years of unpaid research for the co-operative sector, the book would never have seen the light of day. Thanks Lida. Gary Lewis Wamboin NSW October 2006 | VIII | Abbreviations AAC Australian Association of Co-operatives AAP Australian Associated Press AAPBS Australian Association of Permanent Building Societies ABC Australian Broadcasting Commission/Corporation ACCC Australian Competition and Consumer Commission Australian Centre for Co-operative Research and ACCoRD Development ACDL Australian Co-operative Development League ACF Australian Co-operative Foods ACFA Australian Canning Fruitgrowers’ Association ACMAL Amalgamated Co-operative Marketers (Australia) Limited ACT Australian Capital Territory ADFF Australian Dairy Farmers Federation ADIC Australian Dairy Industry Council AFCUL Australian Federation of Credit Union Leagues AFFO Australian Farmers Federation Organisation AFIC Australian Financial Institutions Commission AFP Australian Farmers Proprietary Limited AFR Australian Financial Review AFWCF Australian Farmers’ Wholesale Co-operative Federation AGM Annual General Meeting AIDC Australian Industry Development Corporation ALP Australian Labor Party AMP Australian Mutual Provident Society APCTC Asia-Pacific Co-operative Training Centre APF Australian Premium Foods APRA Australian Prudential Regulatory Authority APWCF Australian Producers’ Wholesale Co-operative Federation ASC Australian Securities Commission ASX Australian Stock Exchange ATO Australian Taxation Office Australian CWS/CWS Australian Co-operative Wholesale Society AWB Australian Wheat Board Berrima District Berrima District Farm and Dairy Co-operative BHP Broken Hill Proprietary BP British Petroleum Centre for Co-operative Studies in Agriculture CASGU (Griffith University) | IX | CBH Co-operative Bulk Handling CCA Co-operatives Council of Australia CCC Co-operative Community Council CCF Christian Co-operative Fellowship CCP Core Consistent Provisions/Common Core Provisions CCUs Co-operative Capital Units CDA Co-operative Dairy Association of New South Wales Limited CDB Co-operative Development Branch CDF Co-operative Development Fund CDP Co-operative Development Programme CDS Co-operative Development Services Limited CDS Co-operative Development Society CDU Co-operative Development Unit CEO Chief Executive Officer CER Closer Economic Relationship Co-operative Federation of Australia/Commonwealth CFA Co-operative Federation of Australia CFG Co-operative Farmers’ and Graziers’ Direct Meat Supply CFNSW Co-operative Federation of New South Wales CFQ Co-operative Federation of Queensland CFSA Co-operative Federation of South Australia CFV Co-operative Federation of Victoria CFWA Co-operative Federation of Western Australia CIC Co-operative Insurance Company of Australia CIS Co-operative Insurance Society UK Limited CNWP Co-operatives National Working Party COD Fruit Marketing Committee of Direction COR Commonwealth Oil Refineries CSR Colonial Sugar Refinery CSU Charles Sturt University CUQ Co-operative Union of Queensland English CWS/CWS English