Are CWB Adjustment/Final Payments an Assignable Instrument

[charliep]

Just a question that is driving me nuts.

Under the new domestic malt barley program, the malsters are able to get an assignment of adjustment/final payments.

Does this mean that adjustment/final payments are an assignable benefit? They are in the case of a landlord on a crop share basis. Can a creditor be assigned CWB paymetns over and above initials? That is, get these payments mailed directly to a creditor verus the farmer? Could a grain company use this as a benefit of delivering to their facilities (top up initial payments by $20/t under the condition the get the first $20 of adjustment/final payments directed to them)? Could forecast final payments become a tradeable instrument (a farmer sell the rights to final payments to someone at a discount and have the payments directed to the buyer of the rights)?

[jmillang]

Charliep: I got a better idea, lets let anyone who wants to buy our grain buy it for a price, forget all the confusion and politics. My god it is just wheat and barley. The cwb could be the canadian buyer for food security and the taxpayer could be the payee and the storer. The farmer could be freed to obtain a price he can live with. Not a below average price created by the boards pooling system forcing him to grow and sell uneconomial licensed wheat variety. There are other more lucrative varieties of wheat that we can grow that the board refuses to market. They are a millstone around progressive farmers necks.

[jmillang]

Oh by the way you don't find the unprogressive farmer on these threads they seem to like being misable listening to the CWB BS and stuck in their never ending rut of begging to the government for help. Lets make some changes for better or worst. Worst might be better than this.

Where are all these so called supporters of the CWB.

[charliep]

Kernel

I likely agree with you. The CWB director election campaign is the forum for this discussion with Agri-ville continuing to contribute to this debate.

My point is to highlight this as a pretty significant change in policy with implications (both good and bad). A farmer needs to be aware of it and its implications for their business (under the assumption that the changes you request don't occur right away).

[TOM4CWB]

Charlie,

Cargill did a simular program, as did Louis Dreyfus on feed barley a few years ago, with some different rinkles.

What seems so absurd, is that we are not allowed to cash price!

What a novel idea... why is it so hard to imagine, a pool for those who need to gamble, and a cash price for those who need stability...

What is so wrong with this simple concept???

[charliep]

I had forgotten these programs. To help me though, did Cargill or Louis Dreyfus take a direct assignment of adustment final payments/pay the money up front or was it simply a commitment that if total CWB payments were below initial payments, they would make up the difference? Was there a CWB press release announcing the program?

I encourage everyone to read the recent CWB grain matters on malt barley.

Comparing six-row malting barley values - http://www.cwb.ca/en/publications/farmers/july-aug-2002/07-08-02-07.jsp

New 2002-03 delivery policies for selected barley - http://www.cwb.ca/en/publications/farmers/sept-oct-2002/09-10-02-08.jsp

An interesting article on the CWB 8 mln dollar feed barley lottery as well.

Handling feed barley interest earnings -http://www.cwb.ca/en/publications/farmers/sept-oct-2002/09-10-02-06.jsp

I note the last paragraph in this article.

"The excess interest earnings will be transferred to a contingency fund. In order to address this situation in the future, the Canadian Wheat Board Act must be amended to change the way earnings are allocated. A change was recommended in the Auditor General of Canada’s report issued in February 2002, and after consulting with farmers and considering the options, the CWB will be seeking an amendment to the Act."

Comments??

[charliep]

Mistake alert.

First paragraph should have been.

I had forgotten these programs. To help me though, did Cargill or Louis Dreyfus take a direct assignment of adustment final payments/pay the money up front or was it simply a commitment that if total CWB payments were below a particular price or pool return outlook (not initial payments as said above), they would make up the difference? Was there a CWB press release announcing the program?

A further clarification but this was for the non board as well. They guaranteed their non board price would not drop below CWB total payments?

[TOM4CWB]

Charlie;

If I remember correctly, the program was for CWB feed barley, for offshore shipment.

And the price was insured by the handler, so assignment did not happen, yet if the price was less than the target price, then the Grain Co. had a contractual obligation to make up the difference to the farmer directly.

So the assignment situation is a twist, but the practical effect is the same...

It is interesting that the CWB got directly involved this time... with the direct stipulation that the buyer cannot charge for services or risk involved in providing this option!

Seems to me that Farmer assignments and the customer backing the CWB pool is anti commpetitive, and creates all kinds of trade and conflict of interest potentials and issues!

What a strange way to get to a cash payment!