Cash and Pooled CWB prices

[parsley]

Steve,

Farmers lose legal ownership of their grain when they sell to any buye, and in thois case, it is the CWB. A transfer of ownership, in this case does not mean we gift our grain to the Board. We sell it to the Board. For money.

The Buyer(CWB) pays farmers the down payment (initial payment), and then they send the rest of the money to the farmer later on, in interim and final payments.

Sometimes, farmers legally purchase grain back from the Board (the buyback).

When you sell your grain to the CWB Steve, they do not even have to sell it back to you if they chose not to. They legally own the grain and have the right of refusal.

Don't confuse ownership with possession. They mean very different things.

Parsley

[Steve]

Charliep

Your question: what is the difference between a buyer and a marketer?

A buyer buys a product, which he can consume, resell for a profit or process it to a different form and consume it or sell for a profit or loss. So a buyer can become a seller (marketer) if the product is resold.

The buyer can be the consumer or end user and that would be the end of the chain.

Parsley

I know the Law that one can not sell something that the person or company does not legally own, but there are many options, sell on consignment, become a partner in marketing a product, pay a down payment and sign a contract to sell the product at a set price or the best marketable price, and the list could go on, but that I believe wasn’t Ianben’s question nor my answer to him.

I believe he wanted to know if the CWB was a buyer for end use or is the board just the middle man ( buy, steal or whatever from the producer) to sell( market) to the consumer or end user.

My answer was the CWB is basically set up to sell ( market ) the wheat and barley for the producer and is not the end user so it is really irrelevant at this point how the board obtains the grain.
We already have too many lawyers so there is no need to use our coffee shop lawyer skills to answer simple questions.

Regards Steve.

[charliep]

I did a dictionary search of marketer (didn't know if the word existed) and found the following.

One that sells goods or services in or to a market, especially one that markets a specified commodity: a major wine marketer.

Ownership is a key issue in this debate. Does the CWB ever take ownership of wheat/barley for export or domestic human food use or does it always belong to the farmer who produced it? One factor I always look for in ownership is risk. Who carries the price risk of CWB transactions?

[parsley]

Steve,
On the contrary, Steve. I think it is important for farmers to read their grain contracts, their insurance policies and read the legislation that governs them.

Ownership is crucial in selling and buying.

1. The Act states the CWB is legally obligated to buy the grain OFFERED to it:

32.(1) "The Corporation shall ....
(a) buy all wheat produced in the designated area and offered by a producer for sale and delivery to the
Corporation..."
CWB policy allows no other option than farmers to "offer" their grain to the CWB

2. The CWB cannot give away the grain they now own, according to Parliament. They cannot store it for forty years either. They have a legal obligation to sell this grain and this is described in the Act:

7.(1)
"The Corporation shall sell....grain acquired by it......for such prices as it considers reasonable."

Selling grain at cost is reasonable, Steve. Discounted selling is reasonable, Steve.

You say, Steve,

"My answer was the CWB is basically set up to sell ( market ) the wheat and barley for the producer...."

I disagree. my answer is that the CWB is a government agency set up to source all the grain it could get its hands on in order to service the Federal Governments financial obligations. ie..grain to war-torn England, current trade imbalances, foreign aid, etc.

And the points of view are contingent upon ownership, doesn't it?

Parsley

[Steve]

Charliep and Parsley

The CWB has to take legal ownership of the grain and with that comes the risk factor, before the board can resell it, and I am not disputing that part of the act or law.

Yes! Parsley one should read and understand any contract before you sign it.

A contract is a gentlemen’s agreement to carryout a transaction but is also backed up with a legislative law to protect each party from abusing each other.

The grain buyers and producers in most cases take it for granted that the contracts are just gentleman’s agreements. A few will try to take advantage of others on technicalities, but if you plan to say in business the gentlemen’s way is much easier.

I am not backing the CWB monopoly and I think we need change as I suggested on other threads, but Parsley there is no need to open the CWB can of worms ( Laws and acts and some that are out dated ) to answer a simple question.

The CWB is a Government agency and lets forget the early stages of the board because it has been revised in some areas, but unfortunately not enough to accommodate the marketing needs for today’s farmers.

The Government is saying that the CWB is a gentlemen’s agreement with the farmers to help the producers market their wheat and barley, but we all know that the Government bureaucracy is the stumbling block for that to happen, so we need change.

So lets go back to the original question and answer that started this debate.
I will try to answer the same question in a different way and again it falls in the gray interpretation area.

Yes the CWB at the present or if revised will always be just another grain marketing competitor in the marketplace worldwide.

Steve

[ianben]

Steve
Thanks for trying to answer my question.

I have seen a disaster with change at MMB.

In a dual market we thought we had a competative buyer when if we looked we clearly did not.

The best example I can think of is the auction system to decribe the sevice our MMB provided.

Like the auction system MMB/CWB allows you to sell all you can produce and risk manages debt.

Like the auctioneer price is of little significance to them, and what happens to the product immaterial.

Now a buyer who pays cash is different he now has an interest in price even the guy who just buys and sells wants to sell for more than he paid.
There is a greater debt risk here though something some people forgot about postMMB.
Pooling not only averages premiums but shares debt. OUch!!!

Lastly what I call a marketer.

This guy will search out new markets for my products and provide a service to my existing customers.

In our hast to be free of MMB we thought we had a marketer when we didnt even have a buyer just an auctioneer.

It doesnt matter what the law says what actually happen in practice.

What best describes your CWB?

It appears to me your grevances with CWB are that they do not buy or market.

Competing with a seller who has no interest in price is bad news believe me

Take a good look at your CWB if you are to run a dual market try to leave a marketer or at least a buyer even recognising a competative seller would help.

[ianben]

Line missing
A marketer will cash buy or pool offer me a service based on my needs. This guy/etc

[parsley]

Charliep, your questions are really interesting ones!

1. "Does the CWB ever take ownership of wheat/barley for export or domestic human food use or does it always belong to the farmer who produced it?"

When the Praire farmer moves 'wheat/barley for export or domestic human food use' to another province or into another country, the farmer ALWAYS loses ownership because he must sell to the Board.


2. "One factor I always look for in ownership is risk. Who carries the price risk of CWB transactions"

This is an important one. Look at demurrage, charliep. The CWB has both ownership and possession. They don't get the boats loaded, but the farmer gets the demurrage bill! Just one example.

Parsley

[Steve]

In the CWB pooling system or any other pooling of products falls under the gray area of ownership.

The CWB would pay the marketing expenses out of the selling price if the board paid the producer cash for his grain.

The CWB pools the grain and asks for delivered when they make a sale and the initial price is lower to accommodate the price risk factor.

The grain buyer estimates and incorporates price risk and marketing cost into the cash price offered to the producer.

A cash sale the producer pays the marketing cost up front and in the pooling system it is deducted after all costs are known and it reflects on your final payment. Yes demurrage charges are a part of the marketing system.

It doesn’t really mater how you interpret the CWB act, but that is what happens in the real world.

[parsley]

Steve,
In the real world:

The farmers who want to market on their own will be granted licenses. They will bypass the Board and market their own grain directly. It is what is already happening now, only this time, ordinary farmer applicants will be allowed to get a license. An extension of privilege, so to speak.

The Board will continue as is with a little less grain to sell. The farmers who really want the Board to market for them will continue having the Board as their single desk.

No Parliamentary change. No referendums. No Act revisions.

Parsley