Charlie;
The CWB will NEVER pay me as a PPO holder, no matter what, even if the futures directly attributable to the specific PPO contract being liqudated are $100/t above the PRO. The PPO holder will still be charged liquidation damages, according to the PPO contract, and info the CWB has given me.
If I was not a CWB "detractor" anti-monopoly type, who knows what the CWB might do to score "political points"?
The CWB will Never even credit a futures "profit" against the PPO liquidation buy-out price on these contracts. This has never been my experience in dealing with non-board contracts. In over 20years of non-board contracting experience, I have never been charged one cent to liquidate a basis, or hedge contract, other than the futures change directly attributable to my hedge. Last year, non-board inverse between Nov. 02 and Nov. 03 was credited to my hedge, and rolled into a contract for delivery in the fall of 03. This simple inverse roll saved me close to $75/t. The CWB refuses to allow any such fair and reasonable contractual settlements. Same goes for Basis Contact cancellations, the CWB is the only marketer I deal with that is unfair and greedy to get every last cent possible out of my hide.
These contracts are totally one sided, the CWB benefits, the contract holder totally at the mercy of the CWB and whatever price they decide to charge, with no way of even determining if the buy-out is a true cost, as there is no alternative to compare or compete against the CWB PPO Contract.
The CWB "sells" the PPO contract to the CWB pool, not to any one anywhere, but just to itself. Therefore the CWB can manipulate these contracts, as there is no commercial transaction in the real market place that happened, when a "designated area" farmer signs up to a PPO.
The CWB says it does not even have an obligation to hold the futures position that the farmer signed into when doing a fixed price contract, until the grain contracted is delivered, thus the reason the CWB will not credit back a futures gain to the farmer, if the farmer must liquidate the PPO Contract.
Since the PPO contract are a huge source of profit for the contingency fund of the CWB, the CWB PPO contract Liquidation cost is an indicator of just how much money is in these contracts for the CWB, the CWB will force delivery, get the profit that way, or get it through liquidation damages.
The PPO contract says this;
Default: General Provisions (as stated in the CWB contract)
"5 b.Further, the Producer shall pay liquidated damages to the CWB to compensate the CWB for its actual losses incurred as a result of the Producer’s default. Such liquidated damages shall be equal to the Buy-out Price in effect at the time of such default.
5 d.The Producer and the CWB agree that liquidated damages determined in this manner are a genuine pre-estimate of the actual damages the CWB will incur as a result of the default by the Producer and that such damages are not a penalty."
These words in the PPO contract are misleading, deceptive, and lead a farmer into believing they will be dealt with in a fair and reasonable manner. Nothing could be farther from the truth, ESPECIALLY for those who the CWB considers to be "detractors" from the pool and monopoly principals. The proof of this is in the write down of liquidation damages as "bad debt" in the 2001-02 financial statements. The CWB elected who they would write off, without the need to do so.
Getting back to further manipulation of the pool accounts, Since the futures positions the CWB did at the time of a farmer signing up a PPO fixed price contract are not matched to actual delivery of the grain stated in the contract, the CWB has another manipulation point, to credit funds to the pool accounts, or conversely retrieve funds from the pooling accounts and tuck them away in the contingency fund. In 2001-02, the CWB credited over 1.7 Million Dollars to the contingency (page 46 2001-02 CWB Financial Statement) fund this way. What will the CWB do in the 2002-03 fiscal year; take 10 million out of the contingency fund?
I ask you Charlie, with the CWB totally in charge of the decision when to lift the futures position, behind closed doors, without anyone to check up on the CWB itself, is this not an example of a system without any accountability whatsoever? What outside observer or audit that checks year end books after the fact, could ever trace what the CWB has done, when the CWB has the ability to "write history" without regard to any scrutiny or oversight while it itself writes the history book?
What farmer should trust this type of a contracting system, a system that is totally run by CWB “monopoly” “pool” politics, designed to prove CWB detractors (those who have decided they need to manage their own risk) are fools?
The CWB will NEVER pay me as a PPO holder, no matter what, even if the futures directly attributable to the specific PPO contract being liqudated are $100/t above the PRO. The PPO holder will still be charged liquidation damages, according to the PPO contract, and info the CWB has given me.
If I was not a CWB "detractor" anti-monopoly type, who knows what the CWB might do to score "political points"?
The CWB will Never even credit a futures "profit" against the PPO liquidation buy-out price on these contracts. This has never been my experience in dealing with non-board contracts. In over 20years of non-board contracting experience, I have never been charged one cent to liquidate a basis, or hedge contract, other than the futures change directly attributable to my hedge. Last year, non-board inverse between Nov. 02 and Nov. 03 was credited to my hedge, and rolled into a contract for delivery in the fall of 03. This simple inverse roll saved me close to $75/t. The CWB refuses to allow any such fair and reasonable contractual settlements. Same goes for Basis Contact cancellations, the CWB is the only marketer I deal with that is unfair and greedy to get every last cent possible out of my hide.
These contracts are totally one sided, the CWB benefits, the contract holder totally at the mercy of the CWB and whatever price they decide to charge, with no way of even determining if the buy-out is a true cost, as there is no alternative to compare or compete against the CWB PPO Contract.
The CWB "sells" the PPO contract to the CWB pool, not to any one anywhere, but just to itself. Therefore the CWB can manipulate these contracts, as there is no commercial transaction in the real market place that happened, when a "designated area" farmer signs up to a PPO.
The CWB says it does not even have an obligation to hold the futures position that the farmer signed into when doing a fixed price contract, until the grain contracted is delivered, thus the reason the CWB will not credit back a futures gain to the farmer, if the farmer must liquidate the PPO Contract.
Since the PPO contract are a huge source of profit for the contingency fund of the CWB, the CWB PPO contract Liquidation cost is an indicator of just how much money is in these contracts for the CWB, the CWB will force delivery, get the profit that way, or get it through liquidation damages.
The PPO contract says this;
Default: General Provisions (as stated in the CWB contract)
"5 b.Further, the Producer shall pay liquidated damages to the CWB to compensate the CWB for its actual losses incurred as a result of the Producer’s default. Such liquidated damages shall be equal to the Buy-out Price in effect at the time of such default.
5 d.The Producer and the CWB agree that liquidated damages determined in this manner are a genuine pre-estimate of the actual damages the CWB will incur as a result of the default by the Producer and that such damages are not a penalty."
These words in the PPO contract are misleading, deceptive, and lead a farmer into believing they will be dealt with in a fair and reasonable manner. Nothing could be farther from the truth, ESPECIALLY for those who the CWB considers to be "detractors" from the pool and monopoly principals. The proof of this is in the write down of liquidation damages as "bad debt" in the 2001-02 financial statements. The CWB elected who they would write off, without the need to do so.
Getting back to further manipulation of the pool accounts, Since the futures positions the CWB did at the time of a farmer signing up a PPO fixed price contract are not matched to actual delivery of the grain stated in the contract, the CWB has another manipulation point, to credit funds to the pool accounts, or conversely retrieve funds from the pooling accounts and tuck them away in the contingency fund. In 2001-02, the CWB credited over 1.7 Million Dollars to the contingency (page 46 2001-02 CWB Financial Statement) fund this way. What will the CWB do in the 2002-03 fiscal year; take 10 million out of the contingency fund?
I ask you Charlie, with the CWB totally in charge of the decision when to lift the futures position, behind closed doors, without anyone to check up on the CWB itself, is this not an example of a system without any accountability whatsoever? What outside observer or audit that checks year end books after the fact, could ever trace what the CWB has done, when the CWB has the ability to "write history" without regard to any scrutiny or oversight while it itself writes the history book?
What farmer should trust this type of a contracting system, a system that is totally run by CWB “monopoly” “pool” politics, designed to prove CWB detractors (those who have decided they need to manage their own risk) are fools?
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