Newsroom
2002
July 26, 2002
Directors look to farmers to determine distribution of interest earnings
Winnipeg In the coming months, the CWB board of directors will consult with farmers on how to use excess interest earnings in the 2001-02 feed barley pool. The board decided to apply approximately $2.5 million out of a potential $8 million in total interest earnings to the returns that will go to farmers who delivered feed barley to the CWB during this crop year. The remaining amount, approximately $5.5 million, will be placed in a contingency fund.
Net interest earnings relating to feed barley are currently estimated at $8 million. This revenue is being earned by the CWB on credit sales of feed barley to offshore customers in the late 1970's and early 1980's. Across the four pool accounts, total interest earnings were $75.2 million in 2000-01 and are expected to be about the same in the current crop year.
"This money is farmers' money and we intend to consult with farmers on what to do with it," stated Ken Ritter, Chair of the board. "Some possible uses could include dedicating the money to develop new varieties with improved agronomics, pursuing additional research on disease resistance and drought tolerance or pursuing market development activities that could increase returns to farmers." Ritter noted that all options would require a change to the Canadian Wheat Board Act.
Ritter said this situation exists because high domestic feed prices are limiting deliveries to the CWB. Deliveries to the feed barley pool in 2001-02 are estimated to be 56 000 tonnes, down from a four-year average of 416 000 tonnes. Given this situation, the board decided to assign enough interest earnings to the feed barley pool to maintain the return at approximately $180 per tonne.
"This value places producers who farm in areas where the CWB traditionally draws much of the feed barley it sells on a relatively equal footing with farmers who sold barley on the open domestic market," said Ritter. "The value is consistent with the price signal farmers were given earlier in the year and also ensures the feed and malting barley markets are not distorted."
Ritter also referred to the Auditor General's special audit of the CWB. In her February 2002 report, Auditor General Sheila Fraser noted that assigning net interest earnings to the pool accounts to which the original credit sale related may result in a significant variation in the amount of interest earnings allocated to each of the pool accounts. Ms. Fraser suggested that the CWB should consider sharing total interest earnings equally among all pool accounts so that farmers get the same amount of interest earnings per tonne regardless of the pool account into which they deliver. The CWB will consider requesting a change to the Canadian Wheat Board Act to allow for changes in the way interest earnings are distributed.
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 organization sells grain to more than 70 countries and returns all sales revenue, less the costs of marketing, to Prairie farmers.
For more information, please contact:
Ken Ritter
Chair, CWB Board of Directors
Telephone: 306-463-5943
Cell: 306-463-9287
Louise Waldman
Manager, Media Relations
Telephone: 204-983-3101
Cell: 204-227-0623