Contingency funds

[craig]

we are currently considering resolutions for our annual meeting. a resolution under consideration is one requiring that any funds acquired by the CWB under the Fixed Price Contracts or Basis Price Contracts for contingency purposes be mandated to go back to producers who used the programs and not the pool accounts. If would seem only fair that because FPC and BPC users have no right to any money in the pool accounts, that it not be allowed the other way.

[Zaphod]

That's probably the best idea. The other option is that surpluses in the contingency fund be used to reduce basis levels in the next year. I have a hard time believing though that they don't have a running tally on the surplus and can't improve basis levels as the season goes on. Every grain company tracks their margins and profits monthly, weekly or even daily. The CWB could do the same.

[Zaphod]

One other thought. They should be allowed to keep the contingency fund at certain size for dealing with market shifts. It's the surplus beyond the $50 that they should hand back, right?

[TOM4CWB]

Craig;

I must question the legality of the "Adjustment Factor" when the CWB Contingency Fund has been maxed out.

As you have said above... where does the CWB get the authority to "tax" cash pricing growers (those who use PPO's)... and put that money into the pockets of pool account holders.

There is nothing in the CWB Act... that gives the CWB DIrectors this kind of "TAX" collecting authority... from what I read in the CWB Act.

You are spot on... when you bring up the contingency fund issue, for the CWB is beyond it's authority to use it in the manner it has been used... to create a nest egg for some other use.

The objective of the CWB Legislation... was to have it break even... for if it was for the contingency fund to only operate in a positive balance... the CWB Act would specifically say exactly that...

Instead the CWB Act says:
"Powers

6. (1) The Corporation possesses the following powers:
6(d) to acquire, hold and dispose of real and personal property, but the
Corporation shall not acquire or dispose of any real property without the
approval of the Governor in Council;"

Craig:

I find no evidence that the CWB has the approval of the Governor in Council to take money from my cash sale and transfer it to the pool account.

Please note the contingency fund is part of Part I of the CWB Act; not Part III... which means deductions are going as a profit to the credit of Part I.

If the authors desired to give the CWB control of the contingency fund... and the balance in it; they would have put it in Part III of the CWB Act.

Profits

"7(2) Profits realized by the Board from its operations in wheat under this Act during any crop year, other than from its operations under Part III, with
respect to the disposition of which no provision is made elsewhere in this Act,
shall be paid to the Receiver General for the Consolidated Revenue Fund."

Application to wheat produced outside designated areas

40. (1) The Governor in Council may, by regulation, apply the provisions of this
Part, in respect of wheat produced in any area in Canada outside the designated area, specified in the regulation.



I find this FUNNY from the CWB's web site:"
Price pooling - Price pooling means that all CWB sales during an entire crop year (August 1 to July 31) are deposited into one of four pool accounts; wheat, durum wheat, feed barley, and designated barley. This ensures that all farmers delivering the same grade of wheat or barley receive the same return at the end of the crop year regardless of when their grain is sold during the crop year."

I note Producer Pricing Options are sold through the Pool Accounts... we just agree to turn the CWB profits going into the contingency fund over to the governement instead of the CWB.

What a tangled web we weave... this Act is not accessed on the CWB Web site... anywhere I could find.

Even Justice Canada doesn't post a up to date copy from what I could find!