Ritz and his government controled grain company is helping themselves to the contingency fund.

[Integrity_Farmer]

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.”

[wd9]

Better the government holds onto it then snow white iceberg and the 7 dorks spend it in court.

[pgluca]

Were you as distressed when they spent it on Lakers and advertising, advertising, advertising...............
at least you may see some benefit from the contingency fund, also it was partly there already.

[gustgd]

The CWB extorted this money out of those that used the PPO's. Seems to me CWB just got a free ride on screwing farmers over for the past 7 months and the next 9.
It's pool or nothing and the pools are being used as a political PAC fund.

[freewheat]

So the govn't is expropriating our money? For 75 bloody years, the stinking cwb has been expropriating our grain, but only in western Canada stewie. You may notice I-F, I did not swear at you. An interesting way to have a debate, no? % bucks says you swear back at me. Any takers?

[Braveheart]

What has changed? Farmes likely weren't going to get the money in the contingency fund anyway. The wheat board was using it for backstopping futures trading losses and who knows what all else.

Another legacy of Ralph Goodale. Ass kicking needed again!

[blackpowder]

So whats your personal take on this I_F?

[charliep]

Perhaps even more interesting, where did the contingency fund money come from originally? The contingency was meant to backstop producer payment options.

[craig]

Good comment Charlie
The board seemed to have forgotten what the orginal contingency fund was for. Became their personel slush fund with no accountability. Maybe we need some to go to the pool accounts when no one in the pool accounts contributed. This spring there was talk that the fund would have to go to at least 500 million as a backstop if the board lost their government quarantees. Who knows where the board was planning to draw funds to cover their added costs. Ultimately those that used the PPo's were asked to provide an unfair share of what the contingency fund was used for. Maybe we should be saying that it's a small amount in relation to all the benefits we will receive. Heard that line somewhere just recently.

[checking]

I don't see any difference between the government using the contingency fund of $60 million under the excuse it can't be determined how much each individual farmer should be refunded, and the $6o million turned over to WGRF because of the same reasoning. It would all be eaten up in administrative costs, right Mr. Gustgd?

[samhill]

Is there any possibilty that the CWB is exposed
in the MF Global cesspool?

[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 into fixed price contract basis levels.

It is not the CWB pooling systems money. If the CWB werewilling to take on the risk of backstopping payment options with 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 in 2008/09 and carrying on to the rebuilding of the account to the current day.

Lots and lots of questions should be asked about the operations of the contingency fund 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.

[Hopperbin]

Integrity what else do you suppose should happen to the contingency fund?
should the money go to the pool accounts to distort the pool? Perhaps if the cwb is having such a windfall on the ppos should they not give farmers a fairer price? Like use up the contingency fund before the government gets it LOL. Why give your enemy a good egg when all you got is rotten ones?

[charliep]

[URL="http://www.cwb.ca/public/en/farmers/producer/historical/pdf/2011-12/2011-12fpcbpccharts.pdf"]charts 13 to 36[/URL]

<a href="http://www.cwb.ca/db/contracts/ppo/ppo_prices.nsf/fixed_price/2011_index.html">November FPC</a>

[chuckChuck]

So what is the difference in the Federal Government or the Alberta government or the CWB spending money to put forth a political position? If it is okay for governments of the day to spit out "propoganda" at taxpayers expense, why is not okay for the CWB to spend money defending the single desk?