National Grain Sorghum Producers officials gave a preliminary thumbs-up to a concept draft of the next farm bill released by the House Agriculture Committee.
"This certainly is a step in the right direction, given the current federal budget situation," says Tim Lust, NGSP executive director.
NGSP was especially pleased that the committee proposed setting the grain sorghum loan rate at $1.89 per bushel, which is equal to the corn loan rate of $1.89; a move long urged by the organization.
"We have been working with House Agriculture Committee Chairman Larry Combest, R-TX, and ranking member Charlie Stenholm, D-TX, for some time to correct this inequity. If this proposal can be signed into law, producers will have the financial flexibility to plant a crop, such as grain sorghum, which most efficiently utilizes resources, such as irrigation," says Lust.
NGSP leaders also gave a positive nod to the farm safety net proposed in the paper, which when combined with other provisions in the farm bill draft, will result in more dollars to the producer than they are receiving under the current farm bill, according to Lust.
"The concept maintains maximum flexibility for producers, while providing a financial safety net," says Lust.
Under the proposal, producers may update their base acres to reflect recent plantings, but are not required to do so. Producers will choose for all crops on a farm whether to use current Agricultural Marketing Transition Act acres or average acres planted to an AMTA contract crop or oilseed for 1998 to 2001. Once updated for the 2002 program, bases will be fixed. These base acres will be used for the fixed decoupled and counter-cyclical program, are 85% of the base acres.
Fixed, decoupled payments will continue with certain modifications. The major modifications are that oilseeds will be added to the list of crops receiving payments and producers will be allowed to update payment acres. Payment rates for current contract crops will be set at 2002 levels.
From a counter cyclical, or safety net standpoint, eligible producers of an eligible crop would receive payments when a crop's price, adjusted for the fixed payment, is below a target price. These target prices for current contract crops would be set at their 1995 levels. The payment rate for a crop would be calculated as the positive cash difference between its target price and the decoupled payment rate plus the higher of the national 12-month season average price received by producers, or the national average loan rate comb and the fixed decoupled payment rate.
Comparable loan rates would be created for all crops, including oilseeds. Current loan rates would continue for all crops, except that soybeans would be set at $4.92 per bushel, minor oilseeds at $0.087 per pound, and sorghum at $1.89 per bushel. Other provisions would continue as current set, including loan eligibility on 100% of current production.
NGSP represents U.S. grain sorghum producers nationwide. headquartered in the heart of the U.S. grain sorghum belt, at Lubbock, TX, the organization works to increase the profitability of grain sorghum production through market development, research, education and legislative representation.