CWB answers misleading public statements with their own misleading statements

[Kodiak]

Are we all in agreement with Mr. Macklin that an audit by the Auditor General in 2001 addresses the questions with respect to the contingency fund balance, transfers from pool accounts, and discretionary trading results in 2007/08?

Mr. Macklin is hanging his hat on an audit that was done, in his words, just "a few years ago" when he was on the Board. But Mr. Macklin is no longer on the board. So unless someone is leaking information to him, he has no knowledge of current operational or financial matters. I have to wonder what basis he has to form this opinion.

[charliep]

As an interesting note, the $90 mln got turned into a loan on the CWB books of
$29 mln (how is was done is documented in the audited statements.

stubblejumper - are you comfortable with where the other $60 mln came from that
financed the deficit on the 2007/08 contingency fund - this includes cash selling
feed barley at extreme profits? Can you guarantee the $18 mln direct from the
pool accounts (no where to be found in the financial statements other than the
reconciliation note (I think 22)? Note I am not including the surplus transfered to
the pooling system in 2004/05 ($7.5 mln). How will the $29 be distributed down
given the allocation provided at the end of each pool statement? Should it be kept
corporately when repaid or returned to the farmers who delivered to the 2007/08
pooling year?

[charliep]

On the $18 mln, the board needs to be clear whether the loss has been
incurred by the pool and a commitment this liability will not be transferred
forward. If the BofD does expect this debt to be repaid, then it should
show up on the 2007/08 balance sheet and not some internal transfer
approved at some point in time by in camera BofD decision outside any
type of external review.

I find it interesting that most corporations with shareholders would have
to present financial information at an annual meeting with the auditors
present to answer questions and where this the report would be debated
and passed. Farmers are provided an opportunity to read the financial and
maybe ask a question at a district meeting but little else. Even the federal
government does seem to be able to ask for more detailed information.
This in an organization transfers money here, there and everywhere with
little process or documentation.

If you want to do some interesting math, look at the real pool returns to
the wheat pool accounts ($3.1 bln) not including PPO portion ($1.8 bln)
and compare that to the losses on both the discretionary trading of $226
bln and losses on PPO trading (exclusively wheat) of which $25.5 mln has
been written off and $29 mln is on the books as debt to be repaid) and
this would suggest the CWB lost 10 % of the value of value for farmers who
delivered wheat to the 2007/08 crop year. May your numbers are
different.

[parsley]

Access to Information should provide motions passed and their recorded votes, by the B of D, for approving shifting around moneies. Pars

[charliep]

What I find interesting is how quiet the single desk
side is on their transfer of payment to the
contingency fund. The $29 mln is pulling close to
$3/tonne out of the pockets of anyone who
delivered to the 2007/08 wheat ex durum pools
(look at the wheat ex durum table annual report). If
you include the $18 mln which (I think) has been
written by the CWB board of directors.

I would feel some sympathy for anyone
complaining about the above but will note that
anyone who uses the PPO products will endure an
extra $10 to $20/tonne of extra pain in basis (read
wider) for 3 to 5 years as the CWB learns to deal
with risk and repays the contingency fund back to
$60 mln plus (with a risk the money could be
pulled out into a bigger CWB contingency fund
down the road). Neither of the above are winners
in the final analysis.

[charliep]

Last sentence first paragraph should be

"closer to $5/tonne if you include the $18 mln transferred from the
pools to cover the contingency deficit".

[TOM4CWB]

Charlie,

This is all a shell game. The books on PPO contracts and pool hedges are not here to actually tell the story of what the CWB actually did.

Until the CWB accounts for all PPO hedges on an accountable basis... both positive and negative hedge reconciliations transparently forthcomming... with true basis charges that reflect the market that the individual grower sold the PPO grain into (ie. West Coast basis margin for west coast shipped produce)

There are so many ways for the CWB to fudge/distort the books... in favour of the pool sales... it staggers that imagination.

Give us a complete transparent, properly weighted PPO sales records... with seperate fair west coast and eastern basis levels... and then perhaps we will be able to actually START to fix this system!