THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Saturday, January 27, 1996 TAG: 9601270249
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY STEPHANIE STOUGHTON, STAFF WRITER
LENGTH: Medium: 90 lines
A sheep levy?
Bah, say some in the sheep and wool industries.
But on Feb. 6, those who live off the woolly flocks will walk into cooperative extension offices across the country to vote on whether they'll fill a gap in government funding to pay for an industry organization, research and promotions like ``Eat Lamb Chops!''
The problem started in 1993 when Congress began phasing out the National Wool Act, which used tariffs on imported sheep to help fund the industry. As a result, U.S. sheep producers no longer receive subsidies and don't have enough funding for their national group.
The American Sheep Industry Association, facing extinction, lobbied Congress, which passed the 1996 National Sheep Check-off Referendum in 1994.
If approved by the nation's sheep producers and importers, the referendum could raise about $14 million annually. Domestic producers would be assessed 1 cent per pound on live sheep sales and 2 cents per pound on unprocessed wool. Wool and sheep importers would pay 1 cent per pound on imported sheep and sheep food products and 2 cents per pound on imported processed wool products.
With the American Sheep Industry Association expected to dissolve, the funds would go to a new, national sheep industry board. The board would watch over the producers and importers, as well as fund research, education and promotions.
Those who knowingly don't pay the fee could be slapped with a $1,000 fine, said Janice Grauberger, spokeswoman for American Sheep Industry Association in Colorado.
``It's the industry taking care of itself,'' said Melvin Atkinson, an extension agent in Virginia Beach. ``With money from the government not coming in, the producers themselves are being asked to fund the programs.''
Why not place the entire levy on all the imports and leave U.S. producers alone? Well, then the fee becomes a duty and ``that isn't legal,'' said Dr. Steve Umberger, a sheep specialist with the Virginia Cooperative Extension at Virginia Tech. But if everyone gets pinched, it's fair, he said.
That idea irritates those in the textile and apparel industry who will have to pay fees on everything from wool socks to double-breasted suits.
Some producers aren't particularly enthusiastic about levies on their flocks, either. After feed, shearing, medication and auction costs, there isn't much left, said Joe Gates, who has more than 100 sheep at his Virginia Beach farm.
Plus, state agricultural officials say it's more difficult to raise sheep in Hampton Roads, home to 50 to 100 flocks, because of the warm climate and distance from the markets. Most of the state's sheep producers are in the Shenandoah Valley, where there are about 900 flocks, extension officials said.
``For what you get back, you might as well take it out back and shoot it,'' Gates said. ``It's just a losing battle.''
Gates said he hasn't decided how he'll vote on the referendum because he hasn't decided what impact it will have or how the tax will be handled.
``I can't tell you how I feel about the referendum,'' he said. ``I've been to a couple of meetings, but it's still confusing.''
While they aren't particularly happy about Congress axing their subsidies, some producers say the new tax is needed to fund a national sheep industry board after their other group dissolves.
``I can't even begin to tell you how much information you could get from them,'' said Robin Freeman, who raises sheep with her husband, Tom, at their Virginia Beach farm. ``As a small producer, it's very, very valuable.''
Agriculture officials add that the sheep industry needs more funding to effectively compete against foreign products and other meats. The beef industry has its so-called check-off program to raise money from beef sales.
Judging by the mixed reactions, there's no telling whether the referendum will pass, said Umberger of the state cooperative extension.
``I would say it's going to be a close vote,'' he said. ``I don't have any idea how it's going to go.'' ILLUSTRATION: Color photo by Richard L. Dunston/ The Virginian-Pilot
Joe Gates, a sheep producer in the Blackwater section of Virginia
Beach, has not yet decided how he will vote in the National Sheep
Check-off referendum on Feb. 6.
[SIDE BAR]
WHO WOULD PAY WHAT
[Domestic producer would pay:]
[Wool and sheep inporters would pay]
For complete copy of side bar, see microfilm
KEYWORDS: SHEEP TAX REFERENDUM by CNB