AAFC Investigation into Farm Income Crisis

[SW1-32-5-4]

The mistake most people make is that they actually believe the drivel that drops from the lips of the cwb. These people at the cwb are protecting a kingdom and a way of life for a breaucracy not accessible by freedom of information. Only when this diabolical organization is on the access schedual of the freedom of information act will there be any acountability and transparency. Until then we will be subject to this liberal sewer system.

[Vader]

So if the CWB were subject to access to information what question would you ask?

[TOM4CWB]

Vader;

Make the CWB accountable, through a fair transparent third party "access to information" process, then you can be sure many, many, questions WILL be asked.

[TOM4CWB]

Vader;

Why isn't this process already avaliable now

[Vader]

I will give you my response. Not sure what the CWB's position is.

The access to information is applicable only to government organizations. Try to get information out of the likes of Cargill. Look how they treated the government when they were asked to open their books.

The CWB is much more open and transparent than their commercial conterparts. Details of transactions are private between parties at the request of the parties. The customers of the CWB want this privacy and details of transactions will remain private forever if that is what the customer wants.

The CWB is moving away from government not towards it. I know that you will argue that the CWB is government controlled. Whatever government control that exists at this point in time will be greatly diminished or totally eliminated over the next while. When that happens all request for the application of access to information will fall on deaf ears. A situation not unlike that you see today.

So get over it. The CWB is open and accountable. Ask your questions. Do so in good faith. Be persistent (like I have to tell you that Tom). Be reasonable and realistic. Look at the annual reports. Attend the corporate accountability meetings. Work with the Director in your District. That is the democratic process that is in place. Work with what you have and you will be much more effective than continually lamenting what you don't have.

[wmoebis]

What parts of the CWB does the gov't control now? I don't know, I thought they were independant we pay all their expences. So I was just wondering what is under the gov't control.

[TOM4CWB]

Vader;

When the CWB is under the same corporate control as every other company in Canada, I will certainly take your advice.

Until the CWB has true corporate shares;

Works on the base of competitive advantage and responsible leadership;

Must earn the right to deserve my wheat through being an efficient service provider...

There is NO WAY you can honestly claim the statements as presented above to be true.

Before 1988 the CWB had no monopoly over farmer's grain in the "designated area".

The CWB Act did not change, but CWB's management sure did, as did the Liberal's attitude towards grain farmers in western Canada.

THe CWB used to give us a base price before April 30th... a gov. gauranteed price at that.

ANyone selling feed barley or wheat in 04-05 will experience the true value and purpose of the CWB...

Certainly it was not and is NOT to maximise the returns of grain farmers in the "Designated area".

[Vader]

wmoebis
What parts of the CWB does the gov't control now?

The Government has control over the appointment of 5 of the fifteen members of the board of directors. The CEO is one of those 5 appointments but the selection of that individual and his remuneration level are determined by the board of directors.

I don't know, I thought they were independant we pay all their expences. So I was just wondering what is under the gov't control.

Other than in the case of a shortfall in the initial payments there is no transfer of funds between the CWB and the Federal Government. Farmers pay all the operating costs of the CWB. The borrowings of the CWB are guaranteed by the Federal Government and for that reason they require that the CWB submit their annual business plan for approval. Also because the initial and adjustment payments are guaranteed the government requires that they approve the setting of those payment levels.

Under the current WTO draft agreement these guarantees have been negotiated away by the Federal Government. In the absense of these guarantees the CWB will be setting their own initial payment levels and will be entirely responsible for the risk management. The delay that was caused by the approval process will be eliminated and producers will receive their CWB adjustment, interim and final payments in a more timely fashion. Much of the criticism about the CWB not operating in a commercial fashion will end.

The CWB could move to make a payment like the 80% EPO the standard rather than continuing with the current government guaranteed 65% initial payment. The cost of this 80% EPO program although minimal would be entirely carried by producers. Perhaps some compensation from the Federal Government would be in order since they are the ones who negotiated away the guarantees at the WTO. This situation is very much like the elimination of the Crow Benefit. Perhaps farmers will be better informed this time and will negotiate for a better outcome.

[Vader]

<TOM4CWB posted Jan 29, 2005 23:06
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Vader;

When the CWB is under the same corporate control as every other company in Canada, I will certainly take your advice. Until the CWB has true corporate shares; >

Sorry Tom, there are many other corporate structures that do not involve share ownership. Co-ops, Trusts, Non-Profits to name a few. There are other aspects to "ownership" other than equity. Ownership can be manifested through control of an entity or through the receipt of benefits.

The most valuable component of the CWB is the single desk. How would you award "shares" to producers which would represent each and every producers fair value of the single desk? If you look at what happened in Australia they implemented a check off which raised almost a billion dollars over a period of 10 years. I suspect that the Australian farmers received share value based on their financial contributions. How much cash would you like to inject into the CWB today to bring the CWB up to the same equity level that the AWB has?

The AWB equity has risen to over 1.5 billion and they have invested in crop input and service companies in Australia and they have invested in what milling in China. Is that the direction the CWB should be heading? If the CWB chooses not to move in this direction will other wheat exporting countries lock up a large share of the export markets with these type of business arrangements and bilateral trade agreements?

By the way did you know that the USA has signed a bilateral trade agreement with Morocco that will give them preferential access to the Morocca durum market. Up until now Canada has supplied virtually 100% of the Moroccan durum market.



<Works on the base of competitive advantage and responsible leadership; Must earn the right to deserve my wheat through being an efficient service provider...
>

This is exactly the basis on which the CWB funcions. The CWB competes on the world market for sales in a highly competitive environment. The competitive advantage of the single desk is well documented. Even the leader of the European Union has quoted the figure of $10.00 per tonnes as being the advantage of the CWB and this is the reason why the EU and the USA want the CWB dismantled.

As far as responsible leadership this is also self-evident. The corporate review at the CWB resulted in staff reduction levels in excess of 100 positions and resulted in savings of millions of dollars per year. Further examples of responsible leadership is the adherence of best corporate governance practices and the review of the entire operation of the CWB by the Auditor General.

Tom, you mention efficient service provider. See my comments above about the corporate review. The CWB's admin costs amount to less than 10 cents per bushel and are offset almost entirely by the interest earnings through the effective management of the long term accounts receivable. The net cost of the CWB to farmers is nearly zero.


<There is NO WAY you can honestly claim the statements as presented above to be true. >

Tom, I am insulted by suggestion that I am dishonest. I believe strongly in the truth and have taken great pains to substantiate my beliefs. I do not take the CWB at face value.

<Before 1988 the CWB had no monopoly over farmer's grain in the "designated area".

The CWB Act did not change, but CWB's management sure did, as did the Liberal's attitude towards grain farmers in western Canada. >

There were many changes to the CWB Act in 1998 which resulted in the current governance structure and many of the flexible marketing options that you have today. The marketing mandate of the CWB did not change and the CWB remains the exclusive authority over the export market. Were it not so the CWB would not be a single desk marketer and would lose its most imporant competitive advantage.


<ANyone selling feed barley or wheat in 04-05 will experience the true value and purpose of the CWB...

Certainly it was not and is NOT to maximise the returns of grain farmers in the "Designated area". >

Farmers marketing into the world export market are facing burdensome stocks resulting from a world record crop of spring wheat, a world record crop of durum wheat, a world record crop of soybeans, and an incredibly large world record crop of corn. This is a reality that is forcing commodity prices to record low levels. If the CWB is able to move Canadian branded products into this market at a premium then there is still a net benefit to Canadian producers. The price levels that we are seeing are market signals and we must each respond to those market signals in the most appropriate manner.

The mandate of the CWB is to maximise returns to produers in the designated area. My fear is that maximising returns does not equate to profitable returns and that we must all address this problem in a much more constructive manner rather than harping away at each other.

[TOM4CWB]

Vader;

There are none so blind as those who will not see.

The CWB has every marketing tool I have, yet the PRO keeps dropping for CWRS #1 13.5, on a year of VERY short supply of high quality wheat world wide.

In real terms the CWB PRO dropped AGAIN in January 05. A CDN$ drop of 4 cents is equal to an increase in value of 5%, plus a big drop in ocean freight on top since December 04, leads to well over a $15/t drop since the last PRO.

We are only a few months into the marketing 2004-05 year.

So did the CWB hedge the CDN$ and already encounter a large speculative loss?

The CWB directors need to come clean and be honest Vader.

You are offended?

PLEASE.

STOP the carnage in our local "designated area" communities caused by the single desk.

The single desk is sucking the faith, hope, and love out of our industry.

The truth is comming out in Ontario now about wheat. Allowing farmers to work together co-operatively will ALWAYS be better than what the "single desk" can provide.

Dispair, Intimidation, and Alienation are the trade marks of the new CWB since 2002.

I would like to know; did Ralph Goodale officially sanction the increased use these tactics, or did CWB Directors and management create this concentrated deceptive/fear force of their own choosing and on their own authority?

[Vader]

Tom, with a world record crop of 615 MILLION tonnes and with Argentina setting the bottom end of the market at $107.50 per tonne what kind of a premium would you pay over Argentinian wheat if you were in the market for milling wheat today? I want to be HONEST and take off your farmers hat and pretend that you were actually a miller with sharehoders to be accountable to.

[Vader]

Hedging the Canadian Dollar? That is what a lot of people kept saying the CWB should have done. Over and over people took issue with the CWB not taking some action to manage the risk of the dollar. They said "the dollar is going higher.... it's going to 85 cents, .... it's going to 90 cents, .... it's going to par".

The CWB has always said that would be pure speculation and refused to do that. The risk of dollar movement is hedged as soon as a sale is made to eliminate the potential erosion of value between the time of the contract negotiation and the payment. The CWB does manage risk in that fashion. But no Tom the CWB did not speculate on the dollar and any change in PRO that you see today is not a result of taking the wrong position on the dollar.

[Vader]

Tom you said "STOP the carnage in our local "designated area" communities caused by the single desk.
The single desk is sucking the faith, hope, and love out of our industry. "

The carnage in the designated area is the same as the carnage in farming communities around the world. It is the same in Kansas. It is the same in the Ukraine. I think that ianben would say it is the same in the UK, and I believe it is the same in Australia.

The problem of low commodity prices has nothing to do with the single desk. In fact the single desk is the only power that farmers have in the face of corporate consolidation.

I read an article about the beef industry that compared it to an hourglass laying on its side. On one side you have this vast number of producers. On the other side you have the consumers. In the middle you have this restriction which is the multinationals. The only way to get your product from the producer to the consumer is through the meat packers. Throughout the BSE crisis consumers have seen virtually unchanged prices in the supermarkets. The restriction in the middle steals all the profits away and chokes the life out of the producer.

It is the same with the grain industry. It is virtually impossible for the average producer to move his product directly off farm to the consumer. Certainly there are some exceptions but for the most part it would be impossible for farmers to move 615 MILLION tonnes of wheat directly to consumers and bypass the multinationals completely. The CWB empowers farmers by providing that conduit between farmers and their customers. The CWB covers its costs and then returns everything else to the farmer. The CWB has no obligation to return a 20% margin to anonymous shareholders such as mutual funds and the stock market.

Shareholders can be as ficle as anybody. Tell them that their stock will not perform as well as predicted and they become very vindictive. They will drive the company into the hands of its creditors. Look at the prairie pools. I am not saying that they were the best managed companies out there but slowly and surely they are being driven into the hands of the multinations. They will march to the tune of the multinationals come rain or shine.

Tom, this is the world you would have us live in. The beef industry has lost billions of dollars in Canada in the last year and a half. You would have us think that this is a workable model. To hear a farmer preach about a free market brings to mind the phrase "divide and conquer". The grain companies should be paying you for all the work you do in supporting their agenda.

[Vader]

Tom, you said "Dispair, Intimidation, and Alienation are the trade marks of the new CWB since 2002."

You must be speaking of all the facts and figures that are brought forth at meetings and in publications. You want the truth? You can't handle the truth. The CWB represents the power of the farmer. In stead of dispair there is hope that we can brand our product as being uniquely Canadian with descerible quality. This is not the corporate agenda. Look at the US system. Farmers in the US do not belive they can ever distinguish their product they way we do and would rather drag us down to their level.

Instead of intimidation there is encouragement. We can be encouraged that there is another agenda. The whole world is not on side with the corporate agenda. It is not every man for himself. There is in fact some safety in numbers. If the numbers are together and not being scattered by the wolves.

Instead of alienation there is cooperation. We agree not to go head to head in the international arena with each other in a race to the bottom.

Perhaps some day farmers in the Ukraine and Argentina will rise out of that rut and begin to erase the inequites they suffer relative to their urban cousins.

Perhaps one day the European and American farmers will have to also join in when their governments find their taxpayers unwilling or unable to continue the subsidization of 80 percent of their net farm income.

Stating facts is not fearmongering. Namecalling is!

[Incognito]

Vader:

I dont want to get in the middle of this private scrap...but....this has been occupying too much of my time this weekend.


I've yet to see a grain company move wheat from Churchill or Baie Comeau to fill a ship in Vancouver.Is this accurate?


Why are the directors not coming down on someone for the demurrage paid in the last two months? 4 million in one month? A sales or transportation Director in any other company would be punted in a nano-second.

or...

Where are the saving in tendering going when the bids for high grade wheat are 4.00 to 6.00 over?

Who screwed up and who is accountable?

Or are the mistakes averaged out over the life of the pool and everyone lives on.

Its like OBLIVIOUS - the game show you don't know you are on.

Transparency, accountability and fiduciary responsibility to farmers...or is that asking too much?