MR. COBB: Good morning. We appreciate the opportunity to share with you some of our views of the sorghum industry. My name is Jack Cobb and I live in Plains, Texas. I'm a farmer and I produce sorghum and cotton. This year it's about equal amounts.

I represent the Texas Grain Sorghum producers Board, and am also a member of the National Sorghum Producers Board. I've been involved in these organizations for more than a decade. I also served as Grain Sorghum Representative to the U.S. Grains Council Trade Policy Coordinating Committee. And through this I represent sorghum producers on international trade policy.

Sorghum business is rather large in Texas. Typically, it accounts for about one-third to one-half of the national production, and the value of the Texas sorghum usually exceeds a half billion dollars annually. It's the number two row crop, in acres, in the state of Texas, ranging somewhere between two and a half million to three million acres each year. Being able to efficiently produce grain sorghum, well, we in Texas need markets where we can sell our grain. Almost 50 percent of our crop in Texas is exported to international markets; about half of the major customer we have is Mexico, followed by Japan and then Spain.

There are several issues we'd like to address this morning, and this is added -- or it will be on your new testimony that we -- you've just been handed. But it's the GMO free grain supply. And the second thing is the inclusion of minimum access agreements and preferential market access arrangements. Third is the reduction of tariffs and the increase of tariff rate quotas. The fourth thing is the enforcement of Agreement on Application of Sanitary and Phytosanitary Measures. Fifth is export subsidies, and then sixth is the State Trade Enterprises or entities.

Grain sorghum stands ready to supply some of the needs that may have been lost, or some of the markets that may have been lost or could potentially be lost due to GMO's. There are currently no June insertions or biological events that happen in grain sorghum plants that are the product of biotechnology research. Our minimum access agreements and preferential market arrangements, we support the inclusion of sorghum in minimum access arrangements, and these agreements can provide opportunities in the immediate future for increased exports of U.S. and Texas sorghum.

Also in the future, as trade restrictions are reduced or eliminated, well, minimum market access agreements provide for future foreign grain sorghum market development.

We see a reduction of tariffs and increase of the Tariff Rate Quotas. We support these -- the reduction of these imposed import tariffs for grain and increase of the Tariff Rate Quotas. Increasing the Tariff Rate Quotas will also reduce the effects of tariffs that they have on restricting international trade.

We want to support the agreement on application of sanitary and phytosanitary measures. We feel, like many of the others have mentioned today, that these are just restrictions to trade in a great many instances and they're really not based on sound science and ethical trade measures.

We want to support the complete elimination of export subsidies, and these export subsidies artificially promote excess production in countries that use them. And while it increases the amount of grain on the international market, it produces an artificially low price. We think we would be much better off if we could do away with these and then let supply and demand control the rice on the world market.

Finally, the U.S. and Texas sorghum producers encourage more transparency with respect to the activities of the State Trading Entities. Increased transparency would allow the international community to monitor the activities of these entities for unfair trade practices in the markets.

We appreciate very much your time and your coming to Texas. And we invite you to come back and welcome you again. Are there any questions?

MR. GALVIN: Thanks, Jack. Good to see you again.

MR. COBB: Good to see you.

MR. GALVIN: You know, we do have this issue of not being able to get our corn into Spain and Portugal because of the GMO issue right now. Do you have a sense for if we change some of that preferential treatment from corn to sorghum, if there might be some additional opportunities there immediately to move more sorghum into Europe?

MR. COBB: Yes, sir, we think there would be. That would not be a problem. We seem to have the supplies on hand.

MR. GALVIN: Does it go largely for feeding purposes or processors right now?

MR. COBB: Primarily for processors there in Spain is what our sorghum goes to. Of course, it ultimately winds up in feed. We're promoting a good bit of food grade sorghum around the globe now and in various other countries, but there are a great number of things that sorghum works quite well on.

MS. BOMER-LAURITSON: I have a quick question. A number of the speakers today have alked about State Trading Enterprises, and you called for increased transparency. What kind of information, specific information, do you think would be useful for State Trading Enterprises to make available that would help U.S. producers compete?

MR. COBB: Some of the big problems that I've heard about is the -- well, take Canada, for instance. And that's their transportation that the Canadian Wheat Board provides for those things. I think if we could get -- if we could see the full view and these things be transparent, I think it would be beneficial to us and we could see just where all these enhancement type things are coming from.

MR. GALVIN: On that point, if I could maybe mention one other thing that we're looking at right now that might provide some more transparency, and that is, as many of you know, every Thursday the Department of Agriculture puts out this weekly Export Sales Report. And that's something that's required by law that goes back to 1972, '73 when we had those big grain sales to the Soviet Union that caught a lot of producers by surprise, and the producers couldn't benefit, in many cases, from the big increase in prices that occurred. So this reporting system was mandated so that U.S. producers would have a better idea of what current sales are occurring on behalf of U.S. exporters.

And this is a system that I think has worked quite well. There's a lot of trade and producer interest in those reports that come out every Thursday. Plus, on a daily basis, U.S. companies are required to report really large sales that might occur, like something exceeding 100,000 tons of grain, for example.

And one thing we are looking at is the notion of having this sort of reporting requirement applied to all the other major exporters; frankly, whether they're safe trading enterprises or not. You know, the idea being that if there was a lot more disclosure about sales and destinations and quantities involved, that sort of thing, then we would all be playing with equal information and that would be beneficial to anybody.

MR. COBB: Sounds great. It would be something we can certainly share with our members.

MR. GALVIN: And again, unlike a lot of things that are suggested, I mean, this is something that we currently do. We require of ourselves, it works well. So we don't think it's unreasonable to explore the idea of having it apply to other major exporters as well.

MR. COBB: Thank you.

MR. GALVIN: Thank you.