E-Malt.com News article: 4375

Canada, Winnipeg: Recognizing the current farm-income crisis, the CWB announced on March 7 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.

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.


09 March, 2005