CWB Contingency Fund Deficit Breakdown

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The CWB’s contingency fund started the 2007-08-crop year with a surplus of $9.2 million and ended with a net deficit of $86.4 million. The CWB reduced the deficit to $28.9 million for the start of the current crop year. Here are the details on how that was done (amounts in millions of dollars):

$9.2 contingency fund surplus Aug. 1, 2007

-$86.4 in losses sustained 2007-08

+$.2.1 interest earned from previous barley sales made on credit *

+$20.0 surplus made from cash trading

+$7.5 surplus from 2005 removed when fund cap was exceeded **

+$0.627 fund interest earnings

+$18 ancillary earnings, mostly interest from credit sales, normally distributed through the pool accounts

——–+$28.9 ———-

* The CWB says it has been adding this money to the contingency fund for several years instead of the pool because interest earnings are so high they sometimes distort feed barley pool returns.

** CWB Act regulations don’t limit the amount the contingency fund can go into deficit, but the surplus is capped at $60 million. In 2005 the cap was exceeded and the CWB took the $7.5 million surplus and distributed it to farmers through the pool accounts. Last crop year that money was taken from the pool accounts and returned to the contingency fund. The federal government has rejected the CWB’s request to change the regulations so the fund can carry a higher surplus. [email protected]

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