Macc/Pdf/2004-05 Annual Report.Pdf
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2004-2005 ANNUAL REPORT WORKING WITH YOU TO BUILD YOUR FUTURE TABLE OF CONTENTS Corporate Values ................................................................................................ 1 Transmittal Letters.............................................................................................. 2 Message from the Chair & CEO ...................................................................... 4 Organization Chart ............................................................................................ 6 Operating Philosophy ........................................................................................ 7 Operational Background ...................................................................................... 8 Year in Review .......................................................................................................... 9 Strategic Direction .............................................................................................. 11 Summary of Operations.................................................................................... 17 Direct Lending Program .................................................................................. 18 Emergency/Special Assistance Programs ........................................................ 20 Guaranteed Loan Programs ............................................................................ 21 Property Management...................................................................................... 22 Short Term Leases .................................................................................................. 22 Land Lease Option Program.................................................................................... 22 Lending Portfolio .............................................................................................. 23 Guarantee Portfolio .......................................................................................... 23 Program Participation By Sector .................................................................... 24 Financing the Corporation................................................................................ 25 Management Report .......................................................................................... 26 Auditors’ Report.................................................................................................. 27 Financial Statements .......................................................................................... 28 BOARD OF DIRECTORS: EXECUTIVE MANAGEMENT: Sandy Yanick – Acting, Chair Charlene Kibbins Joe Eichler Acting Chief Executive Officer Robert Friesen Vice-President Corporate & Program Delivery Goldwyn Jones Ex-officio Board Member Frieda Krpan Karen McEachen Ron Kostesky Vice-President, Program Delivery Chief Financial Officer Lester Vopni General Counsel, Corporate Secretary This annual report can be found online at http://www.gov.mb.ca/agriculture/macc/pdf/2004-05_annual_report.pdf La version française de ce rapport annuel se trouve sur le site Internet http://www.gov.mb.ca/agriculture/macc/pdf/2004-05_annual_report.fr.pdf Cover photo (bean field) courtesy of Manitoba Pulse Growers Association Inc. MANITOBA AGRICULTURAL CREDIT CORPORATION OUR VISION: A sustainable Manitoba agricultural economy OUR PROMISE: To participate in meeting the financial requirements of the agricultural community, thereby contributing to a vibrant Manitoba economy that is globally competitive OUR COMMITMENT: To facilitate acquisition of credit for Manitoba farmers, especially young, beginning, low-equity farmers or those considering higher risk farm diversification, in establishing a viable farm operation To provide the vehicle through which the Province of Manitoba can implement financial agricultural programs, determined by the government of the day as essential for the long-term viability of agricultural production, agricultural producers and rural development To continue to develop MACC’s relationship with private lending institutions in order to provide Manitoba farmers with access to credit under reasonable terms and conditions To administer some of the Province’s emergency and special assistance programs 2004-2005 ANNUAL REPORT 1 Minister of Agriculture, Food and Rural Initiatives Room 165 Legislative Building Winnipeg, Manitoba, CANADA R3C 0V8 The Honourable John Harvard Lieutenant-Governor of Manitoba 235 Legislative Building Winnipeg, Manitoba R3C 0V8 Your Honour: I am pleased to submit the Annual Report of the Manitoba Agricultural Credit Corporation for the period of April 1, 2004 to March 31, 2005. Yours truly, Rosann Wowchuk Minister 2 MANITOBA AGRICULTURAL CREDIT CORPORATION Unit 100 – 1525 First Street S. Brandon MB R7A 7A1 T 204.726.6850 • F 204.726.6849 The Honourable Rosann Wowchuk Minister of Agriculture, Food and Rural Initiatives 165 Legislative Building Winnipeg, Manitoba R3C 0V8 Dear Mrs. Wowchuk: On behalf of the Board of Directors, I am pleased to submit the Annual Report of the Manitoba Agricultural Credit Corporation for the fiscal year ending March 31, 2005. Yours truly, Sandy Yanick Acting, Chair 2004-2005 ANNUAL REPORT 3 MESSAGE FROM THE CHAIR & CEO ver the past year, the agricultural industry has obtain a cash advance on cattle already in the producer’s O faced numerous challenges. MACC's programs possession. must support producers through challenging Border closures and reduced market opportunities for circumstances and, at the same time, provide options to Canadian livestock has resulted in a 30% increase in take advantage of future opportunities. The agricultural Manitoba’s herd size since 2003. About one third of sector in Manitoba requires innovation and forward- cattle in Manitoba are more than seven years old thinking to help its participants sustain and grow their (predate of ruminant to ruminant feed ban). Cull rates operations. Expanding existing and developing new for 2004 were only 4% compared to the pre-BSE average markets aimed at increasing revenues will contribute to of 11%. An increase in slaughter capacity is desirable in the stability of the agricultural community. MACC’s order for Manitoba to work through the cattle inventory suite of lending products supports agricultural issues brought on by the BSE crisis and to prepare the producers as they employ new technologies and policies industry for the future. Increased domestic slaughter to produce safe, quality, world-class products. with complementary market options for producers The composition of farm operations continues to change would support industry sustainability and reduce the in response to an environment of great variability and implications of future trade challenges on the producer uncertainty. High input costs, lower-than-average and the industry. MACC’s Enhanced Diversification commodity prices, ongoing BSE and other trade-related Loan Guarantees (DLG+) have the capacity to help issues, as well as adverse weather conditions, are among establish long-term, viable slaughter capacity in the challenges precipitating change. MACC is actively Manitoba. involved with producers at the farm gate and from this Due to the heavy export dependence of Manitoba’s interactive relationship responds to the producers’ agricultural sector, the continued appreciation of the changing needs through program development and Canadian dollar against the US dollar has presented enhancements. MACC’s pro-active product another challenge to our producers. The value of the development approach supports access to the financial Canadian dollar relative to the US dollar has increased products necessary for Manitobans to enhance their by approximately 26% over the past two years, from an profile in the world market. average of $0.65 US in January 2003 to $0.82 US in Volatile market conditions resulting from the continuing January 2005. While the Canadian dollar’s appreciation BSE crisis in Manitoba and Canada weigh heavily on has reduced the cost of certain imported inputs, these Manitoba’s producers and the rural community. MACC cost reductions were generally overmatched by reduced has developed and adapted programs to assist ruminant returns to producers from the marketplace. producers with their cash flow needs through this crisis. Manitoba’s producers have captured new opportunities The positive impact from the flow of dollars multiplies and met with many successes in spite of the challenges. as it moves through to rural businesses and the The agricultural industry continues to seek new markets community as a whole. The BSE Recovery Loan and expand existing market opportunities for our Program has been extended for an additional year, while commodities. Through the DLG+, MACC is able to give the Feeder Financing Initiative was reintroduced to much needed support to the livestock and oilseed provide up to 100% financing to purchase feeders or industries where value-added opportunities are being 4 MANITOBA AGRICULTURAL CREDIT CORPORATION explored and acted upon. As part of the value-added MASC will be a major corporate entity, providing over strategy, MACC programs help keep revenue within the $1.4 billion in insurance coverage and administering a province, benefiting not only the agriculture sector but loan and guarantee portfolio in excess of $600 million. also all Manitobans through job creation, an increased Lending operations will continue to be run out of the tax revenue base, and various other social and economic office in Brandon, with the insurance operations