I support the 8 RATS. If!!

[Braveheart]

Where the line blurs for me is that the CWB bod has a feduciary responsibility to the CWB. In the past legal challenges have been trade disputes with other nations or railway challenges, etc. This time it is a challenge against the legislator that gave it birth and holds its' fate undeniably in its' hands.

So the question is, does the feduciary responsibility become violated when the bod is not preparing the wheat board for the inevitable?

Yes wd9 we know where the money for these challenges comes from but in my mind the directors owe the farmer a responsibility as well. If they don't think so, they should resign like yesterday.

[wd9]

Just saying it doesn't come from the pool like a bank account. The accounting of the challenge i am sure will just be a legal expense. And we don't even know if the CWB is actually paying for it either.

But aren't crown corporations different? Ultimately the bod's boss is it not the government? Do you sue your own boss when they make decisions and use company money?

[Braveheart]

wd9, I think your last paragraph is on the money with the right questions.

If I remember right, when Ralph set this mess of a new wheat board up, it was called a "blended enterprise". That was because of the combination of elected and appointed directors. This more or less answers your questions. The wheat board is suing its' boss.

It still tracks back to that spineless (but crafty) Ralph Goodale. And yes, he really needs his ass kicked.

[stubblejumper]

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The Harper government, which styles itself “farmers first,” is being accused of hoarding Canadian Wheat Board gains that should be paid to grain growers before Ottawa dismantles the marketing agency's monopoly.

A contingency fund managed by the board is on track to surpass $60-million in cash, but Ottawa says this is not money it will rebate to farmers
Instead, the Tories plan to use available cash to underwrite the shift to a free market for the agency, and they’re in the process of raising the amount this fund can hold to $200-million.

Stewart Wells, a farmer-elected wheat board director who opposes the coming changes, says Ottawa has no right to keep money that ultimately came from grain producers.

“They are expropriating money from farmers to use to float the new grain company that Gerry Ritz is creating,” he said.

The wheat board is about to undergo controversial and divisive changes – which its dissenting chair warns will eventually doom it – as Agriculture Minister Gerry Ritz strips the agency of its 68-year role as the bulk seller of western Canadian grain.

What’s left over will be a shadow of the current board and will no longer be acting for 70,000 farmers but rather for any customers it can attract. Board chair Allen Oberg has predicted it will die after promised federal subsidies run out because it lacks assets to compete.

As the Conservatives prepare to free western farmers from having to sell through the board, a pile of cash is amassing in the agency’s contingency fund – an account that contains the proceeds of futures market trading to hedge against risk.

The Harper government has twice in recent weeks moved to raise the fund’s ceiling. It gave formal notice Nov. 9 that it was hiking the limit to $100-million from $60-million.

On Wednesday, government officials said Ottawa would raise the cap further to $200-million.

Mr. Ritz said Ottawa has taken this “prudent action” of raising fund limits to “safeguard the future of a voluntary Canadian Wheat Board.”

A government official, speaking on background, said any available cash would go to reorganization costs and guaranteeing initial payments and borrowing for the new entity.

It’s not clear how big the fund will grow before the board’s monopoly over grain sales ends next summer, and it’s possible future hedging losses could erode its value before August, 2012.

In explaining its first hike to the contingency fund limit last week, Ottawa said it had to raise the ceiling to $100-million because a forecasted surplus from “non-pool activities” would make the account “surpass its current limit of $60-million.” The government argued it might be “distorting pool returns” if it returned contingency-fund surpluses to accounts ultimately rebated to producers.

Deputy Liberal Leader Ralph Goodale, a former federal agriculture minister, said Ottawa should not be using farmers’ money to subsidize what will end up as a private firm.

He said if Ottawa had kept the cap at $60-million, any surplus cash normally destined for it would have to be returned to farmers once the fund hit that limit.

“They’re in the process of trying to drain as much money into this contingency fund as they can,” he said, “and they plan to use it as a slush fund to bankroll everything that’s necessary to kill the single [grain] desk and create this new creature.”

[mustardman]

There is the smell of Fascism in Ottawa

[bucket]

The feds are on the hook for the boats, maybe the eight directors that decided to buy boats should have had some sober second thought.

I would prefer the directors that decided to buy boats pay for them out of their own pockets but we know that won't happen. So I guess the feds will take the money from the contigency fund.

And then there is the question about the 250 million dollar loss a couple years ago. If all moneys are returned to farmers, then who floated the cwb the 250 million, and who is paying it back???

One thing is for sure, not the persons responsible for the loss!!!

[charliep]

As a reminder, the contingency fund was meant to be a backstop for producer payment options against adverse moves - not a way for the CWB board of directors to pay for steamroller campaigns or transfer wealth from farmers who used the producer payment to the overall pooling system. The way the contingency fund has been built up is to add $20 to $30/tonne protection fixed price basis levels.

Agstar77/mustard - it is not your money or the overall pooling systems. If you are willing to take on the risk of missing the on payment options in the overall pooling system, then you might have an arguement but that has not been the decision of the board of directors/the CWB starting with the repaying of the 2007/08 deficit starting 2008/09 and carrying on to the rebuilding of the account to the day.

Lots and lots of questions should be asked about the operations of the contingency and the decisions that have been made around it. The CWB has an extremely high cost way of managing risk paid for by the individuals using producer payment options with no competition. Makes my blood boil.

[wd9]

Going with the boss scenario, the government is in charge of deciding contingency funds as above, how they are paid out, initial payments, etc. It would seem the board financially makes day to day decisions but the real funding is approved by government.

If the BOD and CEO were in control of the money, THEY would decide what happens with that fund. They don't. Confirms what i've believed all along that the BOD is completely neutered and are a public relations figure for farmers. Never do we hear a single word from the appointed directors. Never. Do they make the actual financial decisions? Its actually quite a mess in board governance. Just thinking out loud with all this.