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This article was published 11/2/2009 (4512 days ago), so information in it may no longer be current.
OTTAWA -- Last year was the "poster-child" year for the benefits of a single-desk Canadian Wheat Board, officials from the agency said Wednesday in issuing an annual report showing producers' returns jumped 57 per cent in 2007-08.
But Agriculture Minister Gerry Ritz threw water on the excitement when he tabled the report in the House of Commons, accusing the board of bad risk-management practices and demanding an explanation for a $90-million net loss in a contingency fund.
Brita Chell, the CWB's chief financial officer, said she was disheartened Ritz would focus on the contingency fund when so much went right last year.
"To be honest, it's pretty disappointing the focus has been narrowed onto this particular issue, considering the year was so successful for farmers," Chell said.
In all, CWB producers saw $7.2 billion in returns for their wheat, barley and durum, with returns up 47 per cent for wheat producers and 94 per cent for durum and malting barley producers.
"That's pretty incredible," Chell said.
She said high market prices were the main reason for the returns, but noted the CWB was able to do a great job capturing the prices at their peak to maximize returns to producers. And that, she said, proves the value of the CWB.
"If any year shows the value of a single-pool Canadian Wheat Board, it was this year," she said. "It was the poster year."
Ritz, however, was not convinced.
He said he was troubled the Winnipeg-based agency rang up a large deficit in a contingency fund that underwrites risks associated with cash trading and the board's producer payment options programs.
Those programs were developed in 2000-01 to give producers more flexibility and allow them to lock in at certain prices.
The CWB has to take the risk to cover those prices if the markets change and has a contingency fund for that purpose.
According to the report, the fund's net loss in 2007-08 was $89.5 million. When he introduced the report in the House Wednesday, Ritz said coupled with the $39.9-million loss in 2006-07, it is clear to him the CWB is not properly managing its risk.
"Clearly, the board hasn't learned from its mistakes and continued on with the same risk-management practices," said Ritz, who has long been a CWB foe.
He told the Commons he has asked the board to explain the losses and provide assurances they've changed their practices.
Chell said the board has already done a process review of risk-management strategies and in the fall hired an external consultant to validate the changes that were made.