Sorghum Loan Should Equal Corn

April 5, 2001

The grain sorghum industry believes the sorghum loan rate should equal the corn loan rate with the equalization extended to sorghum silage. Bill Kubecka, vice president for legislation at the National Grain Sorghum Producers (NGSP), also told the House Agriculture Committee that Congress should approve a counter-cyclical payment program and continue AMTA payments as well as part of the new farm bill.

In his testimony, Kubecka said loan rates for oilseeds should be kept at current levels and loan rates for all other commodities should be increased by 5%. The projected average cost over eight years for increasing other loan rates by 5%, with the exception of oilseeds, and equalizing the loan rates for corn and sorghum would be $575 million.

NGSP believes that there is a need for a national counter-cyclical safety net but 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.

Counter-cyclical payments should be considered market-loss payments rather than AMTA payments, Kubecka said. 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.