It cost prairie farmers about a dime a bushel to run the Canadian Wheat Board in 2005-06.
The board’s recently released annual report for last year shows the board spent $71.9 million on administration last year.
That’s up from the previous year, when administrative expenses were $69.9 million, or about 9.3 cents a bu.
When this year’s expenses are spread out over the 18.8 million tonnes of grain shipped through the board, it works out to a cost of $3.82 a tonne, or about 9.8 cents a bu.
CWB director Ian McCreary says farmers are getting their money’s worth.
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“I think I can safely say that 10 cents a bu. for a marketing service that takes grain from the farmgate to the customer overseas is not attainable in any other marketing system,” he said.
It’s difficult to draw comparisons with the costs incurred by private companies, he added, because they generally don’t make such detailed expense figures available to the public.
One of the board’s longtime critics said she wasn’t impressed by the 10 cents a bu. figure.
Cherilyn Jolly-Nagel, president of Western Canadian Wheat Growers Association, believes some of the board’s administrative expenses could be eliminated, including compensation bonuses and much of its advertising and promotion budget.
If the board is such an efficient, low-cost operation, she added, that bodes well for its ability to operate in an open market.
As always, the largest single expense of running the board in 2005-06 came from human resources, which includes employee salaries and benefits.
Those costs totalled $37.3 million, which is down slightly from the previous year’s $38.2 million.
According to the board’s annual report, other significant expenses (with previous year’s total in brackets) included professional fees of $12.2 million ($10.2 million), depreciation of $9.1 million ($10.2 million), office services of $3.5 million ($3.5 million) and travel expenses of $2.6 million ($2.3 million).
Spending on advertising and promotion was lower in 2005-06 at $1.6 million, down from $1.9 million.
That’s because the board delayed the release and promotion of its Harvesting Opportunity policy document beyond the end of the fiscal year.
Other financial information contained in the annual report includes:
- The board’s contingency fund stood at $44.3 million at the end of the year, down from $48.6 million a year earlier. The fund is financed through surpluses or deficits arising from the operation of the board’s producer payment options, as well as excess interest earnings from the barley pool. The fund cannot exceed $60 million.
- The board’s special account, made up of farmer payments that have gone unclaimed for at least six years, was $2.8 million at year-end, down from $3.9 million.
Money from the account was spent on a variety of programs, including market development, the Canadian International Grains Institute, scholarships and a University of Alberta agriculture research project.
- The board spent $22.5 million to buy 1,663 grain hopper cars that it previously had leased on behalf of the federal government.
The report also lists compensation payments to members of the board of directors. The payments, which totalled $751,433, include annual retainers, per diem allowances and a communications allowance.
The standard retainer is $20,000 a year, with an additional $4,000 for committee chairs. Per diems are set at $500 a day and the communications allowance is $5,000.
CWB chair Ken Ritter received $105,350 in compensation, above the annual limit of $100,000. That included a special $60,000 retainer for serving as chair and $43,350 in per diems. Ritter attended 33 board and committee meetings and 40 industry meetings during the year.
Three other directors received more than the annual remuneration limit of $60,000, including Larry Hill and Art Macklin for undertaking additional duties, and Rod Flaman due to the timing of payments.
The board of directors approved the excess payments.
Adrian Measner, who served as president and chief executive officer during the year, received $286,166 in compensation, while chief operating officer Ward Weisensel was paid $226,663.
