Newsroom
2005
Modified payment option gives farmers early access to cash
March 7, 2005
Winnipeg - Recognizing the current farm-income crisis, the CWB today announced changes to its Early Payment Option (EPO) program that will improve farmers' ability to get money sooner for previously delivered grain.
Effective immediately, previously reported deliveries of wheat, durum and selected barley can be applied to new EPO contracts. Farmers can now receive up to 100 per cent early payment for deliveries of wheat, and 90 per cent for durum and selected barley deliveries already made to the CWB pool account in the 2004-05 crop year.
"The current farm income crisis is being felt across the Prairies and we're doing what we can to address the challenges that grain farmers are facing," said Ken Ritter, chair of the farmer-controlled board of directors. "Cash flow is critical for many grain farmers right now and these changes should help their situation."
"The CWB's general policy is to allow the application of deliveries made only after someone signs up for an EPO contract," Ritter noted, adding this year's policy change is a one-time exception.
Farmers who apply previously reported deliveries to an EPO will receive an additional payment within ten business days, which will include the difference between the locked Early Payment Value (EPV) and the initial payment for the reference grade, less a discount.
Participating farmers will also be eligible for CWB adjustment, interim and final payments when those payments exceed their EPV. This ensures that these farmers will receive a return equal to the pool account, less the EPO discount, should CWB sales returns exceed their early payment value. (see attached examples)
Farmers with EPO commitments made before this policy change can also apply previously reported deliveries that occurred before the date of their EPO contract. Requests to apply a portion, or all previously reported deliveries will be on a first in, first applied basis.
For more information, farmers should contact the CWB's Business Centre at 1-800-275-4292 or e-mail questions@cwb.ca.
The policy change applies all eligible grades of wheat, durum and selected barley. Previous deliveries of CW Feed, No. 4 CWRS, No. 3 CWSWS, No 4 CWAD and No. 5 CWAD can be applied to a feed grade EPO contract. Farmers must deliver tonnage committed under the EPO program through regular CWB delivery contract call opportunities.
Controlled by western Canadian farmers, the CWB is the largest wheat and barley marketer in the world. As one of Canada's biggest exporters, the Winnipeg-based company sells grain to more than 70 countries and returns all sales revenue, less marketing costs, to Prairie farmers.
For more information, please contact:
Louise Waldman
Manager, Media Relations
Tel: (204) 983-3101
Cell: (204) 479-2451
Example for Wheat:
A farmer who had already delivered No. 1 CWRS 13.5 can apply for an EPO today. If the farmer wants a 100 per cent EPO, with a discount of $2.00 per metric tonne this farmer is eligible to receive a payment of $32.95 per tonne over and above the CWB
payment of $171.05 per tonne. For a 90 per cent EPO, with a discount of .50 cents per tonne, the farmer will receive $12.05 per tonne over and above the CWB initial payment.
Example for Durum:
A farmer who had already delivered No. 1 CWAD can apply today for a 90 per cent EPO. With a discount of .50 cents per tonne, the farmer is eligible to receive a payment of $29.15 per tonne, in addition to the CWB initial payment of $160.75.
Note: The CWB's additional payment is the difference between the EPV value and initial payment for the reference grade, less the discount. For deliveries made later in the crop year, an incremental payment will be added to the CWB additional
payment. The incremental payment represents the time value of money to the farmer.