Wheat Growers and CWB Ships

[TOM4CWB]

"February 9, 2011

Wheat Growers denounce CWB’s speculative venture

The Western Canadian Wheat Growers Association strongly opposes the Canadian Wheat Board’s decision to commandeer money owing to farmers to enter the ship ownership business.

“The CWB board of directors should not be taking money from farmers to finance the purchase of ships or any other capital asset,” says Kevin Bender, President of the Wheat Growers. “Farmers on the verge of retirement, needing the money or wanting to invest elsewhere should not be compelled to buy ships.”

Yesterday, the CWB announced it was purchasing two vessels to ship grain and other commodities on the Great Lakes. The purchase will be financed through an estimated $1.00 per tonne deduction over the next four years from money that would otherwise be payable to farmers. This means the benefits of ship ownership, if any, will not necessarily accrue to those who finance the purchase, particularly those who are planning to retire soon from farming.

The Wheat Growers maintain that many farmers might prefer to invest money owing to them in their own farms, their own families or local initiatives rather than enter the ship ownership business. The Wheat Growers also decry the CWB’s lack of prior consultation with farmers over its decision to purchase capital assets.

“Many farmers do not agree that the CWB should be acquiring capital assets or that this purchase is the best use of their funds,” says Bender. “Farmers should have the ability to opt out of any capital purchase and put that money toward purposes they feel are in their own best interests.”

The Wheat Growers also question the propriety of a government-backed state trading enterprise purchasing capital assets. Any such purchases will invariably favour certain private interests over the interests of others.

“The CWB should remain neutral and stick to its mandate of marketing grain in the best interests of farmers,” continues Bender. “It should not be favouring private interests in one distribution channel at the expense of private interests in other distribution channels.”

The Wheat Growers maintain that if the CWB was voluntary and did not have access to preferential borrowing rates, then it should be permitted to compete against private interests. However, until that day arrives it should not be making investments in capital assets that disadvantage Canadians who have made private investments on their own accord.

The Wheat Growers are calling on the federal Minister of Agriculture to overturn this decision or, at the very least, to give all farmers the opportunity to withdraw the portion of their money that would otherwise go toward purchasing these vessels.

For further comment, please contact:

Kevin Bender
President
(403) 350-4949"


Well said!

I would simply add this:

THe CWB had an obligation to formulate the payment of these ships by assuring grain growers who actually use these ships pay for them.

Western 'designated area' growers who ship their board grains to the west coast of Canada... are at a competitive disadvantage.

While I recognise investments in technology, innovation, and Capital assets are truly needed... the manner in which this project was initiated and is to be paid for... is lacking common sense and fails to respect private property rights.

The CWB board of Directors has again embarrassed both our nation... and 'designated area' grain growers!

Sincerely,
Tom4CWB

[SASKFARMER3]

Good points.
It is an embarrassment to all western Canadian farmers. I just want out let me have that and the believers can have their precious cwb. JUST LET ME OUT!

[Fransisco]

Here's what Conservative MP Randy Hoback had to say about it.


CWB’s Purchase of Lake Vessels Raises Many Unanswered Questions



OTTAWA, February 9, 2011 – Randy Hoback, the Member of Parliament for the federal riding of Prince Albert reacted with concern regarding the recent announcement by the Canadian Wheat Board that it is purchasing new lake vessels that will be ready for service in 2013 as part of a larger purchase by Algoma and Upper Lakes. Although not opposed to the ownership of such assets by the Canadian Wheat Board, questions remain as to whether or not wheat and barley producers had a say in their purchase, and whether they will have a say in the way these ships are used to market their grain.



“The purchase of these lake vessels raises many questions,” said Mr. Hoback; specifically:



1. Did the CWB hold consultations with producers regarding this purchase?



2. Why wasn’t this purchase raised during the recent election of CWB directors?



3. Was there an open tender to the purchase these ships? Is there an open tender for the management of these ships?



4. Is the use of the Pool accounts a fair way of paying for these vessels?



5. Is this the best use of farmers’ money? With the decline in acres of wheat and barley, would this money be better spent on plant breeding and developing higher yield high quality wheat and barley varieties?



6. If there is a deficit in the pool accounts is the Government of Canada on the hook for paying for these ships? Will the CWB undertake practices that will favour the employment of these vessels at the expense of farmers?



7. Will the ships be given preferential treatment to Thunder Bay over Prince Rupert or Vancouver?



“The CWB is going down the path of acquiring assets without the consent of producers. This is yet another reason why producers should have the ability to opt out of the CWB’s single desk," added Mr. Hoback. "Not only do producers remain unable to market their grain freely, they now no longer have a say in the acquisition of major assets by an organization they are supposed to run. Farmers should not be forced to be part of a state trading enterprise which forces them to take on liabilities they do not want.”

Mr. Hoback will table a motion at the Standing Committee on Agriculture and Agri-Food to request that representatives of the Canadian Wheat Board appear to answer these and other questions regarding the purchase of these lake vessels.

[Fransisco]

From the Barley Growers...



CWB PURCHASE OF VESSELS SHOWS CAVALIER APPROACH TO FARMERS



Airdrie, AB. – February 9, 2011: “The Western Barley Growers Association (WBGA) strongly condemns the CWB’s use of $65 million of farmers’ money to purchase two new lake vessels, says WBGA president, Brian Otto.

The CWB announced yesterday that it has agreed to purchase two lakers as part of a larger purchase of seven vessels, under an agreement with shipping companies Algoma Central Corporation and Upper Lakes Group Inc.

Western Canadian producers were not consulted on this major departure from the CWB’s mandate of marketing grain.

“This is clearly outside the CWB’s mandate of marketing grain”, says Otto. “Decisions of this magnitude and direction require consultations with farmers. The CWB board insults Western Canadian farmers with this cavalier approach.”

“The CWB states that it is run by farmers and that it strives to continually get farmers opinions on issues, but that clearly did not happen this time”, says Otto. “Agreements of this nature and the business plans around them take time to develop. The CWB had ample opportunity to get producers’ input on this but failed to do so.”

In the CWB board election held last fall, the concept of the CWB making investments in infrastructure with farmers’ money was not presented as an election issue, not even by the three incumbents who would have known of the plans.

“We understand that while a deal of this nature is being negotiated, details cannot be made public. But the concept of investing farmers’ money in infrastructure could have been discussed openly without violating confidentiality. The incumbent directors who ran in last November’s director elections were privy to this information and the idea of using producers’ money in this manner should have been presented to producers for their input. Farmers were not given the opportunity to vote for a candidate on the basis of where he stood on this issue.”

The CWB also surveyed farmers in December on various issues.

“The WBGA will be monitoring the results of that survey to see if it posed any questions regarding CWB investments”, stated Otto.

It is obvious that this deal has been in the planning stages long before today’s announcement.

“It is our view that the CWB board was secretive about this major departure from its mandate. Since the CWB is not a voluntary organization, producers who don’t support this cannot even ‘opt out’. If the CWB is true to its statements that the CWB is run by farmers, then we should have had input into this decision.”

The CWB does not require ownership of these vessels to fulfil its obligations to farmers. It could have entered into long term agreements to utilize these vessels, much like the CWB has done with terminals.

“Farmers would rather invest their money in their own farms and not on a purchase totally unnecessary for the CWB to perform its mandate on behalf of farmers.”

The WBGA encourages every producer to contact their CWB director and member of parliament expressing their concern and disapproval of this latest decision by the CWB. We also encourage Minister Ritz to instruct the CWB to put this deal on hold until all stakeholders have a chance to provide their input.

If the CWB is comfortable spending $65 million on lake vessels now, what will they spend our money on next?

Western Barley Growers Association is a strong voice for a vibrant, market responsive barley industry in western Canada.

[Fransisco]

From the Winnipeg Free Press...

OTTAWA -- Agriculture Minister Gerry Ritz lambasted the Canadian Wheat Board Wednesday for buying ships.

In response to a planted question from a backbench Conservative MP during question period, Ritz called the board's $65-million purchase of two ships to carry grain across the Great Lakes an irresponsible scheme that puts farmers' money at risk.

"I have constantly told the wheat board that farmers' money in the pool account is off limits to them," Ritz said. "It should not be misappropriated like this."

Ritz said farmers weren't consulted and accused the wheat board of treating farmers' money as a "slush fund."

Board chairman Allen Oberg dismissed Ritz's comments as uninformed. "Minister Ritz can say what he wants, but from a business case, this is a solid decision."

The wheat board announced Tuesday it will spend $65 million over the next four crop years to buy two ships to move grain across the Great Lakes. The board said the purchase means Prairie wheat farmers will share in the profits of shipping grain on the lakes.

The grain is destined for eastern Canadian ports and ultimately exported to Europe, Africa and Latin America. Prairie grain shipments through eastern Canadian ports have increased more than 35 per cent in the last decade to 3.8 million tonnes of wheat board grain in 2009. That figure is expected to keep rising in coming years as demand grows for Canadian wheat and barley.

Oberg said it will take less than eight years for the wheat board to make back the money spent to buy the ships, which is a decent payback period on ships that have a minimum lifespan of 25 years.

[wilagro]

And did all of you squawkers protest when the government purchased rail cars for shipping your grain?

[silverback]

I find it incredulous that the minister supposedly in charge of the wheat board (Ritz) would have ZERO knowledge of this purchase!.

I do not buy his outrage at this time. If nobody objected he would have been all for it today.

Would it be too much to have somebody to oversee this gov't organization with some nuts?

[LWeber]

There was a shortage of railcars when they were purchased and there was inherent problems moving grain to port. Ever heard of lake freight being short? Wonder why the U.S. is using the St. Lawrence?

There is an overabundance of water freight right now and will be for the forseeable future as production was ramped up in 07/08 to meet demand ...

DUH

[TOM4CWB]

Wilagro,

I thought you SAID Minister Ritz was in favour of you buying new ships?

You said in your last post you agreed with Minister Ritz!

What happend?

If eastern 'designated area' growers were forced to pay for the true costs of these boats... ALONE... they would be opposed to this purchase as well!

Since I must pay for a boat I will never use... then it is fine with you Wilagro?

Thanks for that!

[bucket]

Why don't the current shipowners invest in the new technology and reduce their costs? ANd send the savings back to farmers through a new deal the cwb works out with them.

Bottom line: Someone caught someone ****ing a goat. This thing reeks of measner and ward.

[TOM4CWB]

Wilagro,

Since it is proven the CWB management is mistake ridden... and clearly does not understand what they are supposed to be doing...

A safe assumption can be made that this is one SIMPLE example of a long line of mistakes we have not heard about YET!!!!

[Fransisco]

Hey willagro, I've got a great "investment" idea. I'm going to sell your land and buy the golden gate bridge with the money. It's a guaranteed money maker. I know just as much about turning a profit on a bridge as Stewart Wells does on a Laker. You can't lose.

[wilagro]

Sorry Franny, I'll soon be putting some of my money into an arena in Quebec City...a "sure" money maker...at least for some politico.

[Fransisco]

Sorry but you have no choice, you'll be funding both!

[Fransisco]

Here's what the Lakers will look like...