CWB Flexible Delivery Program?

[Vader]

Charlie and Tom,

I will admit that simplicity is desirable but it should not be the guiding principal behind the design of a program. Charlie, are the staff at AAFRD deterred by the complexity of the system that is evolving at the CWB? You say they understand it and are assisting CWB staff in educating producers.

Tom, the quality of Canadian grains is the result of some other factors that you failed to mention. You did not mention the variety registration system, or the Canadian Grain Commission, or perhaps most importantly our segregation system. The CWB works as an integral part of this system to extract premiums from customers such as Japan. Japan does not pay the same price for wheat from Montana as it does for wheat from the CWB.

You want a simple cash price. That means that a "basis" must be imposed to restrict delivery when the market does not want product delivered. I canvassed producers on that issue over and over again at my district meetings. Producers are not great fans of "basis" especially when it reaches $50.00 per tonne.

With the introduction of the Delivery Exchange Contract coupled with the existing pricing options I believe that we are coming to a point where producers will in fact have as much flexibility working with the CWB as they would have in a open market. In so doing we retain the single desk marketing advantage and preserve the ability to extract premiums from the brand recognition that has been so much a part of the CWB marketing program over the years.

The CWB will continue to evolve to better serve the needs of producers, recognizing their needs for cash flow and flexibility. It will not be the simple cash price you are looking for Tom, it will in fact be much better.

Simple does not equate with best. The old volkswagen beetle was simple. A volkswagen Passat is anything but.

[charliep]

The issue is not complexity. The issue is having one organization making all the decisions about the values used in all the contracts with little or no accountability. If the current system uses a markets, then lets have clearer information about processes and more more market oriented signals.

Going with a daily cash price would be much simpler, easier to administer and involve less risk to both farmers/the CWB.

I will note the build up in the contingency fund and the allocation this year of $7.5 mln back to overall pool returns. A contingency fund is necessary but I note that there has not been a year that has even approached digging into. Now the CWB has achieved the $50 mln cap, does this mean that any extra money from programs will be moved to the pool accounts? Does this mean the DPC, FPC, EPO will be a profit center for the pools? Should this money be redistributed to people who use the contracting programs? Are the real costs (development, administration, etc.) reflected in the CWB annual reports? For contract users, it is one thing to be at the bleeding edge of CWB contract development. It is another to be a revenue source for pool accounts.

This frustration of mine goes to old issues like the freight adjustment factor, payment spreads, etc. that happen every year but no one ever asks about/tries to understand.

[TOM4CWB]

Vader;

"Tom, the quality of Canadian grains is the result of some other factors that you failed to mention. You did not mention the variety registration system, or the Canadian Grain Commission, or perhaps most importantly our segregation system."

None of these factors you recognise, in addition to my list: are contingent on the CWB "single desk".

They can be mutually exclusive.

How to distribute the premium for the services that create this value is what is being questioned.

In my small mind those who take the risk, do the work, and provide the quality should be paid.

THe CWB "single desk" does nothing but cost me at my farm gate.

Example: Supply this spring (06) of Japan with 03-04 CWRS from Montreal instead of from a neighbour's bin.

ANd Montana DNS, at times; is actually paid a premium to CWRS... not less. It has stronger gluten which some millers need from time to time to upgrade other wheat when blending.

Your "single desk" view of the world is going to be the down fall of the CWB Vader.