Soybean Growers Call for Competitive Income Supports, Biodiesel Incentive Payment

The American Soybean Association (ASA) today announced its proposals for Congressional consideration during debate on the 2007 Farm Bill. The proposals follow a year-long process during which ASA collected grower input and developed economic analysis of various farm policies.

"The new Farm Bill allows policymakers to correct major inequities in price and income support levels that exist under the 2002 Farm Bill," said ASA President Rick Ostlie, a soybean grower from Northwood, North Dakota. "While soybean farmers are familiar and comfortable with the structure of farm programs under the 2002 Farm Bill, they are concerned that current support levels don’t provide an equitable safety net for soybean production. We also want make sure the Farm Bill assures the continued growth of the emerging biodiesel industry, provides effective conservation practices on working lands, and continues strong support for soybean research and export promotion."

The ASA President noted that "the Administration Farm Bill proposal increases spending under the direct payment program. We would prefer to see any additional funds used to level the playing field by setting more equitable marketing loan rates and target prices, and through income-generating opportunities like biodiesel that are good for soybean growers and the nation at large."

Commodity Title

The soybean target price established in the 2002 Farm Bill does not provide an equitable safety net compared to support levels for other program crops. This has resulted in unbalanced income support and distortions in planting decisions.

• ASA is proposing that Congress adjust the loan rates and target prices for various commodities to common percentages of the Olympic average of season average prices in 2000-2004. Marketing loan rates should be set at a minimum of 95 percent, and target prices at a minimum of 130 percent, of this price average. For soybeans, these percentages would establish a $5.01/bushel loan rate (up from $5.00/bushel), and a $6.85/bushel target price (up from the $5.80 bushel) for the duration of the 2007 Farm Bill.

Energy Title

Soy-based biodiesel is a vital component of a robust Energy Title that can allow American agriculture to play a key role in boosting U.S. energy independence as well as economic development. The Energy Title in the Farm Bill should include:

• A biodiesel incentive payment to support continued growth of the young U.S. biodiesel industry in the face of sometimes subsidized foreign imports. This is particularly important since biodiesel does not have a tariff to protect the biodiesel tax incentive from imports, similar to the tariff that shields the U.S. ethanol industry.
• Continuation of the Biodiesel Education Program that awards grants for education programs for governmental and private entities that can switch to biodiesel. The 2002 Farm Bill created the existing program that has helped introduce truckers, health groups and many others to the benefits of biodiesel.

Conservation Title

Soybean growers support a robust Conservation Title that emphasizes conservation on working lands. ASA calls for:

• Expanding the Conservation Security Program into a national program. This program needs more funding in order to have a chance to work. Additionally, funding for the Environmental Quality Incentives Program (EQIP) should be increased.
• Adjusting the Environmental Benefit Index for the Conservation Reserve Program (CRP) to allow non-environmentally sensitive land currently enrolled in the CRP to return to production or to produce energy crops (e.g., soybeans for biodiesel production, corn for ethanol production, etc.).

Trade Title

ASA calls for increased funding for the Foreign Market Development and Market Access Programs, as well as all for food aid programs, including P.L. 480 Titles I and II, the McGovern-Dole International Food for Education and Child Nutrition Program, and the Food for Progress Program.

Research Title

ASA supports the creation of a National Institute of Food and Agriculture (NIFA) within the U.S. Department of Agriculture to provide competitive grants for food and agricultural research. ASA continues to support funding for soybean research, including authorization of an Innovation Incentive Program to provide grants to encourage commercialization of traits that improve the quality of U.S. soybeans.

Details of ASA's 2007 Farm Bill proposals, title by title, are available here.