Grain Sorghum Producers Appear Before Committee

Apr 4, 2001

Grain Sorghum Producers Appear Before Committee

(April 4, 2001)

Grain sorghum producers spent the morning presenting specific farm policy recommendations to the House Committee on Agriculture. Witnesses emphasized the need for a loan rate equal to that of corn, the need for a counter-cyclical safety net, and continuation of AMTA payments.

"We are well past the halfway point in this series of hearings and while we have made significant progress in terms of collecting ideas and beginning to ruminate on them, there is much work that remains to be done." said Chairman Larry Combest (R-Texas).

Mr. Bill Kubecka, the Vice-President-Legislation of the National Grain Sorghum Producers (NGSP), presented testimony on behalf of the grain sorghum industry. The NGSP set forth the following policy recommendations:

Loan Rates:

· The loan rate for grain sorghum would be equalized with the corn loan rate. This equalization would be extended to sorghum silage.

· Loan rates for oilseeds would be kept at current levels.

· Loan rates for all other commodities would be increased by five percent.

· The projected average cost over eight years for increasing other loan rates by five percent (with the exception of oilseeds) and equalizing the loan rates for corn and sorghum would be $575 million.

Counter-cyclical Safety Net

· NGSP believes that there is a need for a national counter-cyclical safety net, but believe that it must take into account county and regional production and marketing anomalies that might not trigger payments or impact national supplies.

· Any counter-cyclical payments would be constructed on a commodity-by-commodity basis.

· NGSP is currently studying a county or regionally oriented counter-cyclical program in place of a nationally oriented program.

· Payments from such a program would be viewed as market-loss payments rather than AMTA payments. The crop would have to be planted and produced in order to qualify for the counter-cyclical program. NGSP believes that such a plan would fall within the boundaries of WTO spending regulations.

Loan Deficiency Payments

· NGSP supports the current LDP program but advocates a re-alignment of loan rates between crops and adjacent counties.

· The beneficial interest rules would be changed to allow those who have lost beneficial interest to apply and receive and LDP, at the rate that was calculated on the day the producer lost beneficial interest in that production.

AMTA Payments

· NGSP supports continuation of AMTA payments.

· Production Flexibility Contracts (PFC) should be extended through the next Farm Bill, and annual payments should be frozen at the 1999 level.

· Providing these payments would require $5.8 billion in annual budget authority, or $1.8 billion annually more than the current baseline.

· The AMTA payment would be calculated using the historical crop base acres and yields that established the 1996 Farm Bill payments, and AMTA payments would include historical program crops.

· Participating farmers would annually certify their planted and non-planted PFC acres with the Farm Service Agency (FSA). All crops that are eligible for a federal payment would be required to certify planted acres.