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Rix, page 2 

 Sepember 28, 1993 



In an effort to help address the problem, USDA did announce the 

 implementation of a "special" recourse loan. Both recourse and non- 

 recourse loans are being utilized in South Dakota. According to the 

 state ASCS office most of the loans ware non-recourse loans, with the 

 producer signing a statement stating the producer was responsible for 

 meeting the loan requirements on quality. When asked if they see a 

 possible problem with the non-recourse loans, the state ASCS office felt 

 that with loan rates as low as they are, all loans would be paid back. 



Additionally, elevators were having to cope with the problems of 

 purchasing, storing and re-selling the grain. In order to protect 

 themselves, some elevators purchased equipment to test for the presence 

 of vomitoxin. However, to obtain exact levels of vomitoxin, samples 

 would have to be sent to labs equipped to do such testing. Some 

 elevators quit testing and chose to buy on the basis of dealing with the 

 levels later. 



The quality disaster provisions created within the disaster 

 programs should have offered some consolation. The quality adjustments 

 for 90, 91, and 92 have turned out to be a disappointment. Based on the 

 grade rather than the price received, few producers will receive any 

 benefit from the program. Presently the state ASCS office is working on 

 adjustments for the 1990, 1991 and 1992 growing seasons, so, no figures 

 were available as to the potential number and amount of the claims. The 

 quality formula for 1993 is being reviewed by our state ASCS office, so 

 comments regarding the efficiency of the disaster program are limited. 

 However, the payment received by producers will not come close to the 

 lost revenue that they have experienced. 



In early August, the National Association of Wheat Growers urged 

 USDA to implement a CCC feed wheat purchase and donation program. The 

 implementation of this program could have limited the heavy discounts at 

 the elevator, supported farm income and utilize wheat of lower quality. 

 The implementation of this program would have produced another option 

 for the producers as well as prevented downward pressure on corn and 

 other feed grain prices which have also been heavily effected by this 

 year's weather. This program would be extremely beneficial to have in 

 place when such circumstances, as was the case this year, occur again. 



In summary, nearly every spring wheat producer in the state of 

 South Dakota has been effected by harvest delays and scab infection. 

 Many producers believe that the situation provided an opportunity for 

 the marketing system to take unfair advantage of them; extremely high 

 discounts for both scab percent and vomitoxin levels; price differences 

 for X4% protein spring wheat of a $1.00 or more at bushel at elevators 

 less than 50 miles apart; protein premium payments figured in tenth of 

 a percent at one elevator and a full percent at another; and no recourse 

 for the producer to take. Producers in the extreme north east corner of 

 South Dakota are still waiting to harvest their grain. The investment 

 of time and money has been made, yet the verdict on our return has yet 

 to cone in. 



Thamk you for the opportunity to relate these concerns, thoughts and 

 ideas. I would welcome amy question about my statement. 



(Attachment follows:) 



