CWB wants to manage payments

[craig]

Front page article from this weeks Western Producer states that the CWB wants to use contingency fund to guarantee any payment increases during the marketing year. Our democratic CWB who prides itself on treating all farmers equally is now suggesting that it is quite all right to take funds from the farmers who used the Producer payment options and distribute them freely to those in the pool accounts. Oh yes they might have to take some additional funds out of the pool accounts to build the contingency fund to a high enough value. This is their out. The contingency fund was not set up for this proposed purpose. There is a need for the following. Determine and remove all fund contributed to the contingency fund from barley interest earnings. If the CWB wants to use that as a slush fund for there proposal, I quess I have no problem with that. A contingency fund cap needs to be established that is reflective of what is needed to properly backstop Producer Payment options. Surpluses above and beyond the cap need to be returned to producers who use the PPO's based on their level of participation. I repeat and continually repeat that under current regulations and the new proposal the CWB has the opportunity to manipulate returns to producers using wide basis levels for the PPO's and in turn using those funds to prop up the pool accounts. It is actions such as what is proposed that only feed the desire to be able to market outside the Board. If producers who use the pool accounts want to build a contingency fund then by democratic choice they have that right.

[disker]

craig,
I couldn't agree with you more. I think that just the fact the cwb has brought this idea along this far means that either they are terribly unaware of the issues with the contigency fund, or worse, are aware of the issues and still want to use it to help the pool accounts. I hope the Winter wheat group gets a response from their letter and that you will let us know about it.

[parsley]

The Canadian Wheat Board started marketing organic grain because some organic farmers claimed they could not market their grain.

The CWB has chosen to market organics for only a FEW SELECT PRODUCERS headquartered in Southwest Saskatchewan. Not all organic producers, but a select group.

The CWB will pool the earnings and return them to this select group.

craig, if the shipments go awry, or the delivery for some reason is not met,(remember the deer poop episode?) or the sale becomes neutered, will the conventionally-funded contingency fund be expected to cover the organic loss?

Parsley

[craig]

Parsley not sure about organic grains. There is a need to seperate organic's from regular grain otherwise you create a similar concern to what I have presented above. That is taking money out of one producers pocket and putting in the hand of another.In terms of rejected shipments we likely pay whether we have a contingency fund or not.

[parsley]

The organic pool is separate from the conventional.

With, (I'd venture but don't have a clue), 20 to 50 farmers participating, there is no emergency cash built up, right?

There go your markets and there go your funds!

[craig]

Parsley my only comment is that the contingency fund was set up to backstop producer payment options. I would suggest that producers who use these options should have no problem funding the contingency fund for this purpose. As suggested above the barley interest payments should be removed from this fund. Then the program is self funded and can become totally seperate from the pool accounts. Any funds generated within the program need to stay within the program and surplus funds need to be distributed back to those who use the programs. This is the only way I see to avoid manipulation by the CWB to serve their own purpose. Right now it is no more than a tax on producers who want to work outside the pool accounts.

[parsley]

http://72.14.203.104/search?q=cache:KJzYWyBpD1MJ:www.kis.usask.ca/CWB_Studies/CWB-GuaranteesStudy.pdf Canadian Wheat Board %2B Iran&hl=en&gl=ca&ct=clnk&cd=3




"The CWB's third use of borrowing is to finance investments. The CWB states that it makes investments for the purpose of cash management. In the last two years the CWB has ended the year with larger than normal investment balances. In 2002/03, the CWB held $1.4 billion in investments and $1.6 billion in 2003/04. This is up from an average of $200,000 in the years 1999/00 to 2001/02. Details on the nature of the investments are not provided and should be questioned."