De Pape vs Hursh on CWB Ships

[riders2010]

Hey bearcub bin to a grey cup lately! Oh yeah I forgot your team doesn't go there! Sorry

[mbratrud]

The large issue here for me is the precedence it sets. This is not the CWB’s mandate, and if I were consulted I might have looked at it thought it was a good Idea. But if freight across the great lakes were such a lucrative venture the private sector would have filled the void. No instead they are letting their fleet rust away.

Only a $1 a tonne, tomorrow maybe they buy some Terminals a what’s a couple more bucks a tonne the Farmers won’t miss it they are rolling in it.

Bottom line is Farmers should have been consulted. Again, I don’t like the precedence this sets, that they feel now they can step out and just spend our money. At the very least I would challenge the CWB to be completely transparent on this and prove a cost benefit through a 3rd Party. Using the real cost of Money and not just free farmer money. If they can prove that this was a good decision good on them. Next time ask me first.

And Kevin I’m not even out to “get” the Board, I just don’t like some of the things they do, and its my democratic right to be vocal about it.

I’M Joe Farmer

[gustgd]

and now Shawn Haney weighs in
make sure you leave comments in his real Agriculture blog

http://realagriculture.com/2011/02/11/the-cwb-gets-into-a-boatload-of-ships/


Is there anything that the Canadian Wheat Board does or says that does not come with controversy? This week the Canadian Wheat Board announced that they are purchasing two lake freight ships at the cost of $65 Million dollars. Much of the criticism came immediately from the Western Barley Growers and the Grain Growers but the CFA supported the concept.

There are several points and questions being discussed in many different coffee shops this morning.

Is the purchase of assets outside the mandate of the Canadian Wheat Board?
Why were farmers not aware of this shift in strategy, especially with the recent elections?
Based on estimates, the cost to farmers is $1 MT over the next four years. Some are arguing that this is in poor consideration of soon to be retiring farmers who will see limited benefits from the ships. Others are saying that this money would be better put to use in farmers own pockets so that they could reinvest in their own farming operations.
According to the CWB’s calculations, the ships will be paid for in 6-7 years and have an expected use of 25 years. The estimated net benefit over the life of the ships is $250 million which is returned to the CWB bottom line.
As you have heard me say before when the CWB is in the headlines, farmer’s brain’s leak out of their heads. Whether you are pro or anti CWB, it is hard to argue with the raw business numbers of this purchase. What is being played out in the media is the politics of the CWB which I am not all interested in. I think this is an interesting play for the CWB in the sense that if it works out it may lead to more transactions like this which will have a benefit to farmers. When you leave the politics out you can think more rationally and clearly. To me this is not a pro-choice or pro-single desk debate. What should be discussed is the business justification of the purchase and evaluate it properly.

If the profits are returned to general revenue, then the benefits are to all farmers in Western Canada. If the CWB’s is responsible for the marketing of farmer’s grain and if the savings are passed onto farmers then farmers are getting the benefit. If the CWB is utilizing lake freight already and now can utilize it’s own asset this is good business. In my mind this is no different than a farmer buying a semi grain trailer because he is getting tired of paying custom haulers to deliver grain to the elevator for him. It is also the same as packing plants owning trucking companies to better vertically integrate and achieve logistic cost efficiency.

Everyone is talking about the mandate of the CWB and that this is a breech of it. It would appear after some research that owning ships is no different than rail cars. They are movable assets and not real estate. If the CWB purchased a grain terminal then that would classify as a breach of the mandate.

What’s your thoughts? Leave your thoughts or questions in the comment box below and remember no politics.

Tags: Canadian wheat board, Shaun Haney

[gustgd]

and my reply

Tough not to talk about the politics of grain when referring to "The Monopoly" but because you asked so nice Shawn here it goes.
A few reasons why the CWB should have asked farmers about ASSET ownership.

1) Precedent, today it's a dollar a tonne for ships. Tomorrow will it be $5.00-$10-$20/ tonne for short line rail- flour mill- port facilities. What if they have a *good* business plan?
Remember the Sask wheat pool of the early 90's? Ports in Poland, Robins doughnuts, hog barns, a fleet of trucks.............. What did that do to shareholder equity?

2) No clearly defined ownership. If I pay $1/ tonne for 4 years what does my farm get? I realize how selfish this sounds yet this is what it comes down to in many decisions. Yes it may pay off over the life of the ships but so might owning CN shares.

3)They never consulted ever...... I go to more farm and CWB meetings than most and this is the first I've heard of it. Maybe I should have said something when they got into their own quality assurance lab, but they said they had a good business plan. btw I've recieved their talking points on what is considered consultation. Your not asking but pretty weak if you ask me.

4) and on and on and on........trying to keep the politics out of your blog
but if people are interested https://www.agriville.com/cgi-bin/forums/viewThread.cgi?1297875116

Thanks for taking an interest Shawn but theirs more to this story than you have written.

[Fransisco]

Looks like Shaun has drank the kool-aid.

[TOM4CWB]

The CWB must be tempting him with an 'adscam' payment... just like most of the other farm media already sold out for!

Sorry... 'TalkingEskimo' again!

[Lifer]

Francisco and Tom. You guys are off base with Shaun's comments.

I don't see Shaun as "drinking the kool-aid". I don't see him as preaching the condescending truth. I believe he is beginning debate. pretty simple.

I agree that the ships are a foolish investment. I believe that the CWB has a lot more to gain for farmers by working on how they market the grain. Also on how they allow farmers to make decisions for each of their own businesses.

Savings on logistics that may bias the CWB on how they ship grain in the future is not wise and not good business in my opinion.

[TOM4CWB]

Lifer,

"As you have heard me say before when the CWB is in the headlines, farmer’s brain’s leak out of their heads. Whether you are pro or anti CWB, it is hard to argue with the raw business numbers of this purchase."

If Shaun had to pay over 5 figures into buying these two ships... over the next 4 ears... perhaps he would be having a 'brain leak' as well.

If this was not an insult... what was it meant to be... a complement???

Lifer... I saw no redeeming respect for any of my property rights in that article... by Shaun... only disrespect for my family and community.

Shoot Judgement & undeserved insults at us... expect something in return.