<b>By DOUG SCHMITZ<br>
Iowa Correspondent</b> </p><p>
 
WASHINGTON, D.C. — The National Grain and Feed Assoc. (NGFA) last week flatly rejected a USDA proposal to create a nationwide grain sorghum checkoff program, citing that such a move would financially saddle U.S. sorghum producers.<br>
“It is our member companies that will bear the burden of implementing the checkoff on a national basis, including the costs associated with having sufficient personnel, accounting and recordkeeping systems to collect, remit and refund the assessments,” stated the NGFA, which represents about 900 U.S. grain, feed, processing, exporting and other grain-related companies.<br>
“It is our members who also typically bear much of the de facto education, information and public-relations functions associated with commodity checkoffs,” the NGFA added.<br>
In February 2006, the National Sorghum Producers (NSP) and several state sorghum checkoff boards asked the USDA’s Agricultural Marketing Service (AMS) to assess a checkoff amounting to 0.6 percent of the market value of domestically-produced or imported sorghum.<br>
From 1984-2006, the National Agricultural Statistics Service (NASS) reported a drop in planted acreage of 10.8 million acres. According to NASS, the 2006 crop was 277.5 million bushels, compared to 866.2 million in 1984, with declining acres and production leading to decreased private investment in sorghum.<br>
The NSP, which submitted a formal checkoff proposal to the AMS in December 2006, said these declines brought about a “technology gap” between sorghum and other crops such as corn, cotton and soybeans, which could be overcome by U.S. producers investing in their own research through a national checkoff. According to the NSP, a national checkoff would provide authority for needed self-help investment for an industry facing several daunting challenges.
 “The investment of checkoff funds can address a lack of yield improvement and technology, enhance sorghum market development and promotion and stimulate lagging ethanol research through focused research, information and promotion programs,” the group stated.<br>
Under the USDA proposal, first handlers would be required to collect the checkoff if they purchased or took possession of more than 1,000 bushels of U.S.-produced or imported sorghum in a calendar year, for marketing into commerce.<br>
Although the NGFA said it supported research, market promotion and education efforts to increase production, demand and utilization of U.S. commodities, it stated the proposed sorghum checkoff was flawed in several respects. Its opinion was that the costs of implementing, administering and overseeing a national checkoff could outweigh the revenues that might be generated.
The NGFA urged the USDA to conduct a comprehensive cost-benefit analysis to quantify the impact of expanding the checkoff to apply to the less-than 10 percent of remaining U.S. sorghum produced in states that do not have a checkoff.<br>
In addition, the NGFA said the analysis should assess such items as the degree to which U.S. export markets for sorghum would be increased through additional funds generated by a checkoff, and the estimated increase in U.S. sorghum production that would occur in response to increased market utilization directly attributable to a checkoff.<br>
Currently, there are six states operating producer sorghum checkoff programs: Kansas (presently the largest sorghum-producing state), Texas, Nebraska, Oklahoma, Louisiana and Arkansas, which all comprise 90 percent of total U.S. sorghum production.<br>
Nebraska Farm Bureau President Keith Olsen said while he supported the idea of a national sorghum checkoff, he’s also concerned that the proposal calls for only 15-25 percent of funds collected to be returned to state programs, whereas existing programs for beef and soybeans provide for a 50-percent return.
“The 15 to 25 percent proposal would decrease funding for Nebraska ’s state grain sorghum checkoff by up to 46 percent, and would severely handicap or end the state program,” he said.<br>
Olsen added that national checkoff board membership would be a concern as well, because two of the largest grain sorghum-producing states – Kansas and Texas – would have a majority of seats.<br>
Similarly, the Arkansas Farm Bureau (AFB) and the Grain and Sorghum Producers of Arkansas said in a joint statement that at current prices, the proposed checkoff “would nearly double what Arkansas sorghum producers currently pay in state-collected checkoff fees, while cutting by half funds passed back to the state.”<br>
The AFB added at sorghum prices to the farmer of around $3.30 per bushel, the collections from a national checkoff would rise to approximately $208,000, with 15-25 percent returned to individual states for research – which, at the highest level, is 25 percent, or $52,000.<br>
As an alternative to a nationwide sorghum checkoff, the NGFA said it would seriously consider retaining the current system in which producers in states with the greatest share of U.S. sorghum production may choose to establish and collect the checkoff within their respective states.<br>
But, if the USDA proceeds to establish a nationwide checkoff despite the NGFA’s objections, the group said it would seriously consider providing reimbursement to first handlers to offset the direct costs incurred in collecting, remitting, maintaining records, determining the state-of-origin of sorghum purchased, informing and educating producers about the assessment and providing refunds associated with the checkoff.<br>
Pending the receipt of positive comments, the AMS said it would proceed with the rules process for a national checkoff, the NSP added.