My Conversation with John De Pape

[jdepape]

Price transparency IS relevant. Although it's better now than it was under the CWB, it still needs improving and at least now, there are things we can do about it. So, yeah, I'm trying to improve things.

As for corruption, here's an example. The CWB used to demand "CWB load terms" on vessel loading which extended the days to load in contracts, almost guaranteeing to "earn" dispatch (a credit paid for quicker loading - the opposite of demurrage). So they would pay, say, 6 days of vessel time (to load) and use only 3, meaning they would get 1/2 of the cost back in dispatch. (Dispatch is typically paid at half the daily rate for the vessel.) So essentially they would pay for vessel time they wouldn't use - and knew they wouldn't use. To earn $1million in dispatch means you spent $2million in excess freight, so dispatch is actually a cost. So when they said they "earned" dispatch, it actually came at an unnecessary cost - to farmers. And why did they do it? So they could brag about "earning" dispatch; "earning" dispatch looks a lot better than paying demurrage.

But it gets worse. CWB senior management got bonuses that were at least in part based on dispatch they "earned". So there was an internal incentive to "earn" dispatch even though it meant an added cost / lower grain prices to farmers.

The year after I brought my analysis to Ian White's attention, demurrage and dispatch were hidden in the Annual Report and bonuses were no longer based on dispatch.

Either they were ignorant or they knew what they were doing and did it anyway.

So ignorant or corrupt. You tell me.

[blackpowder]

Nothing funny here.
This conversation won't end until all the participants are in the ground.

As a grain company yourself Agstar, how's your hedging program going this year?
Would I be unkind to assume you have a surplus of storage and likely some aged inventory on hand?

[agstar77]

You would be wrong.

[blackpowder]

Thankful for that; and your ability not to have.

[LEP]

I know from talking to people in the trade, the CWB used to swap stocks with grain companies. So companies would trade their barley in the Peace country straight across for say stocks in the Lethbridge or Reddeer area where the value was much higher.

My friend in the trade said it was thousands of tonnes. A direct hit to the feed barley pool.

[wmoebis]

jdepape did you bring this to the BOD and the Minister? Why didn't you bring it back to farmers themselves? If the BOD and Minister were aware they should have been liable to fix it long ago. That is what they are elected and appointed for. Something wrong for sure. Maybe the shreders were working over time when it was shut down for a reason.

[sumdumguy]

My buddy from university days worked for CWB, he told me they had gala banquets even when they sold wheat for under the COP, he thought that was quite funny. For some reasonI didn’t think that was too cute when we had to dump our durum in the pit and pick up our $1.10 when cash price was $5.50 US at Fortuna. We’d wait for a year to get our other 50 cents as a final payment. The young guys on here haven’t lived through the wheat board days. After 1980 and lentils, canary seed and glenlea wheat, we grew ZERO bushels for, “ the board”.

[jdepape]

wmoebis - I told a lot of people at the time. I even blogged about it. Going to the BOD would have gotten me no where - I had absolutely no currency with the BOD (except with a couple of them who also had no currency there). But I got on with Ian White very well - he always had an open door for me and I knew he would listen. And he did.
Ignorance or corruption? Not sure really but I figure I leaned toward ignorance because there were other episodes where I confronted them - and, well yes - ignorance.

[Landdownunder]

Have I missed something here why did agstar77 go for the jugular ive always respected Jdepape opinion on here from afar in australia, comment was water of a ducks back but has derailed the thread a bit hey agstarr mate your better than this.

[wmoebis]

jdepape - I just find it odd that the Gov't appointed auditor never picked up on that or how it was reported. Also why didn't the directors in the know or Ian himself make it public and fix it instead of just hiding the reporting?
Those kinds of things are my issue with the way it was ran and closed instead of doing their job and changing it.

Where was Ritz all this time when this was going on, he should of been on top of it, he was in charge and must or should have known what was going on. He still got paid to be Minister in charge and likely got bonuses too.