Contingency Fund

[LWeber]

Good work Chaff.

So if the Act wasn't changed, the CWB is not operating within the Act ... twice.

In your example and closing the Malt pool.

When do you think the Minister will approve an increase to the initial payments when the CWB is operating outside of the Act?

Short answer... he won't.

[charliep]

Will also note that some programs (i.e. the early payment option have contributed to the contingency fund every year. Durum (exception this year) and barley have also contributed positively to the contingency - none of these are backed by futures.

[LWeber]

Should the Minister of Agriculture send in the Auditor General to review the 2007/08 CWB financial reports?

Go vote:

http://fertilizerbuddy.blogspot.com/

[TOM4CWB]

Charlie,

I note the $20M from cash trading barley as another income source.

There is a real problem here.

THE BASIS.

I believe you will find the basis benefit from volumes traded through PPO contracts... are going through the pool instead of as part of PPO contracts. The CWB clearly admits the basis gains were notable... because we are required to lock in a basis... that is created out of thin air... and has been very profitable for the CWB.

Where is the accounting for the basis gains the CWB gets from PPO contracts?

If the CWB 'gives' away basis value... to grain purchasers... in a manner that is not competitive to export from the US... of DNS that is of the same intrinsic value... this needs to be resolved.

We should also know the total value of futures traded... to see just how active the CWB is... what % of the exchange trade they command... and benchmark performance.

It is a package deal... and transparency if key to understanding what is going on.

How much of the 'discretionary losses' were attributable to PPO contracts?

Does anyone have a clue?

Why exactly should PPO contractors pay for CWB 'discretionary losses'?

I wouldn't trust the CWB to be fair or equitable for a millisecond... on the proper risk management and basis accounting on these systems.

The CWB theory... of 'single desk' premiums... takes basis gains for the pools... because they believe the whole North American wheat market is at a premium BECAUSE of the CWB 'single desk'.

[Fransisco]

<b>BUSTED!!</b>

[Fransisco]

BTW- Great work chaff!

[Fransisco]

Follow up question: So what are the consequences to violating an act of parliament? If they are indeed doing things contrary to the act I would guess that would make these activities "illegal".

Maybe the Mounties should be accompanying the Auditor General.

[parsley]

One of the problems with the auditor general doing the review is that she "asks" the experts for advice on the CWB, which in the matter of the Wheat Board, means asking the CWB themselves. Beeen there and done that.

She heads straight for the CWB experts. And boy, do they give her the information they want her to follow, and ends up writing a report hand in hand with the CWB.

Several have mentioned an "outside report" might be better.

I will post on the blog hopefully tommorow and I will call you tommorow Red Baron,.. I forgot to tell you in my email reply.

Parsley

[chaffmeister]

Concerning an audit, the CWB hired a consultant a while back to review the PPOs and advise how to improve them. Apparently they hired Ron Gibson who used to work for the CWB.

Hmmmmmm - do you think we'll ever see that report?

I like the idea of an outside review - a review of the program and a review of Gibson's report.

[Fransisco]

A review is fine, I guess, but with the kind of money we're talking about here, year after year, heads should roll. The phrase "fire them all" comes to mind. The reality is they all got pay raises again this year for doing such a wonderful job. The term "clueless" also comes to mind.

But really, I want out. Time and again the Board has abused it's monopoly position and everyone a pile of money. This past year is just the latest and possibly the most egregious example.

The incompetence will not change until it has to compete. Prime Minister Ignatieff," ...tear down that wall".

(Does anybody really think Harper's still in charge)