CWB Sale

[bgmb]

I'm not a big FNA fan. However I dont like the lack of info regarding this cwb sale. Farmers grain is what built the cwb and paid for its assets now they are being sold off without any info available to farmers or the public.

to quote from another thread;
westernvicki
"bgmd; Absolutely! If the actions today were those of the board of the now defunct model, we would be crying foul, Agriville would be ablaze. However, an unelected board and an unaccountable process is occurring. Producers money, perhaps, rail cars, assets being negotiated and we are all strangely silent... amazing indeed. What was that Nixon said."

[bucket]

Here is some info.

The buyers get to keep the money they spend buying the cwb.


So if you bid 250 million. You have 250 million in the pot when you take over.

Check it out before you respond...

It's unbelievable.

[farmaholic]

What....? Links to something you're saying...

[farming101]

Ritchie Brothers should auction it off. The bidding would be unbelievable!

[bucket]

Farmaholic

Call FNA and ask what the deal was.

That's why they were in there - free money.

It is a political gift.

So connect the dots. My take its going to whoever puts the most MPs on a board.

It has nothing to do with farmers or their interests in the grain business.

Railcars gone poof into thin air. As well as 75 years of legal theft from western Canadian farms.

And it continues but the conservatives just made it legal for every grainco to do it as well.

[farmaholic]

I seriously doubt any procedes from the sale of the CWB will make its way back to Producer's pockets. Hasn't the court challenge as it was presented been denied?

[bucket]

Like the fna commercial said there was enough money removed from western Canadian farmers pockets last year to start a new grainco from scratch.

The returns from the cwb were to be returned to farmers every year. But somehow farmers had 500 employees, railcars and offices. Free day care for employees etc etc .

All worthless now?

[Hopperbin]

Sept 9 weatern producer sums it up very well in my opinion. It was fna that proposed the money stay within the cwb to be used for further expansion and purchases.



A Saskatchewan-based organization is hoping to acquire a majority interest in CWB — the former Canadian Wheat Board — which is due to be privatized in the next three years.Farmers of North America is asking its membership for “non-binding expressions of interest” in buying a controlling interest in a privatized CWB.On its website, FNA states that it intends “to build a world class farmer-owned grain handling and fertilizer distribution business, starting on the grain side with the transformational move of attempting to take over a majority interest in the CWB.…. We feel that sales of a block of assets like this — of sufficient quality, scale, interoperability and geographic position — are very rare.… There are few public companies available to pursue in the grain handling industry in Canada, and many of the privately held companies are long-term, family owned organizations that have no apparent intention to sell. Moreover, of the related transactions that have occurred over the past two years, a number have involved asset acquisitions by the CWB including both critical port and inland terminal facilities.”FNA is currently in the process of contacting its members and non-FNA farmers to gauge interest in acquiring a majority interest in CWB.Information contained on FNA’s website suggests that investments by individual producers would start at $10,000 and could run as high as $75,000 or more.The opportunity to invest in a farmer-owned grain company would be open to producers who are not FNA members.FNA spokesperson Bob Friesen declined to say how much money would need to be raised in order to acquire a controlling interest in a grain company.FNA’s members have already expressed an interest, at least in principle, in acquiring grain handling, fertilizer and transportation assets, he added.“We are asking somewhere between 3,000 and 10,000 farmers to invest between $10,000 and $50,000 each,” Friesen said.“I know that’s a really broad number, but in there you can probably to do your own calculation as to what that might look like.”FNA is already in the process of raising money to build a large farmer-owned fertilizer plant at Belle Plaine, Sask.That initiative, known as ProjectN, will proceed regardless of whether FNA carries through with plans to acquire a controlling interest in CWB.On its website, FNA says it foresees the construction of as many as four fertilizer handling facilities, or “supercentres,” per year, within each of the three key regions under review.With respect to grain handling, FNA believes that between one and four high-throughput elevators can be constructed each year. The actual number will depend on FNA’s success in acquiring existing businesses.Friesen said FNA is considering acquisitions of existing grain handling facilities as well as capital investments in so-called green field projects, or new ventures.When asked whether FNA or its members have already made capital investments in new or existing grain handling facilities, such as those recently acquired by CWB, Friesen said FNA has only been involved in “project development” or “preparatory work” aimed at acquiring a grain company.Although Friesen did not refer to CWB specifically, FNA’s website makes numerous references to plans aimed at acquiring a controlling interest in the former Canadian Wheat Board.“The effort is not actually to buy the CWB,” the FNA website states.“This is not a typical scenario with a seller and a buyer, where the seller receives the money from the sale. The money raised by farmers to gain majority control of the CWB are proposed to stay in the company as an expansion investment.“In our view, the true value of the CWB lies in its physical assets and that these can become the core of a future-oriented grain handling business. We believe that the extra value captured under our proposal is unique and one that would likely only occur in the context of the CWB privatization.”According to FNA, CWB transactions that have occurred over the past two years — including the acquisition of port and inland terminal facilities — make the former wheat board an attractive investment opportunity.In an email to members, FNA called CWB’s facilities a “rare block of grain handling assets that will not likely come again in our lifetime.”However, FNA’s website goes on to suggest that the acquisition of CWB assets is not the only option available to FNA members.“There are several alternate opportunities we are looking at for grain handling and marketing, only one of which is the CWB privatization.”CWB officials have stated on numerous occasions that they would like to see an ownership model that gives western Canadian farmers a significant stake in the privatized grain company.For the past year or more, farmers who have marketed grain through the CWB have accumulated equity in CWB at a rate of $5 for each tonne of grain delivered.Until now, the approximate value of the privatized CWB has been largely unknown.Based on figures furnished by FNA, the Saskatoon-based company is hoping its members will invest $100 to $150 million — perhaps more — to acquire a controlling interest in a grain company

[bucket]

Government guarantees of 1 billion and the cwb has a value of 150 million.


Building a turnkey grainco is worth more than that.

But seeing as how WIT shareholders gave away those assets I can see the logic here as well.

And don't start about what viterra would be worth had glencore not been able to hide that cash cow.

[wilagro]

You can bet your bottom dollar that the government does not want farmers or farmer owned organizations to own or control the CWB in any shape or form.

In any event The CONservative Wheat Board should be the name for this new entity as the old CWB is no more as the legislation and the Act which created it are now null and void for the most part.

The government has served its private sector well in this transition and the graincos can now reap the benefit with little or no competition from farm owned or controlled corporations. Live with it...reality prevails.

[bucket]

I am living with the new reality.

But this isn't quite what I was expecting.

I expected open and transparent reporting of grain sales, vessel reports, rail car unloads etc. that would help farmers and the industry make good business decisions.

BTW that is what they have in the states - a true open market. Not only in marketing grain but industry transparency.

Instead we got the opposite extreme of the spectrum.

Extremes on either side makes the system fail.

[MBgrower]

Bucket, actually the true open market is in canada, where the government does not legislate private graincos and railways to report weekly purchases, sales and unloads.

[bgmb]

What some of you guys dont sem to understand is that just because the government gets out of the way does not mean the market will function correctly or that you will have "perfect competition". Google oligopoly and read the definition.

[bucket]

mbgrower

SO what do you call the system in the states, where incidently, we get the majority of our prices from????????

Open means the system is transparent, only then can it function properly.

If the americans had the system we had in Canada, there would be civil unrest worse than what happens when an african american gets shot without cause.

[MBgrower]

Understood bucket, but there are many who mistakenley believe a true open capatilistic market is one with minimal government interferance. Ritz and harper are good examples.