The American Soybean Association (ASA) today indicated that U.S. soybean producers are facing a significant and growing challenge from South American farmers, particularly in Brazil. In testimony before the Senate Foreign Relations Subcommittee on the Western Hemisphere, ASA urged Congress to address key issues including modernizing river transportation, enforcing intellectual property rights, increasing soybean research funding, investigating Brazilian domestic subsidies, and expanding foreign market access and domestic market demand.

"Prospects for future growth in world demand for both soybean meal and soybean oil are bright," said ASA Chairman Bart Ruth, a soybean and corn producer from Rising City, Neb. "ASA’s goal is to position the U.S. soybean industry to maximize its return from the growing global market over the next century. Opportunity exists to address competitiveness issues both at home and abroad."

The expansion of the U.S. soybean industry has been a tremendous success story over the last thirty years. From 46 million acres and 1.3 billion bushels in 1972, U.S. soybean production grew to 72 million harvested acres and 2.7 billion bushels in 2002. The industry has strongly supported expanding international trade by reducing tariffs and eliminating other trade barriers to increase access and encourage demand for soy and livestock products in global markets.

"The rise in competition from South American exporting countries, and the certainty that it will increase over the next several decades, make aggressive opening of major developing country markets in Doha trade negotiations essential," Ruth said. "How we all decide to address this challenge will affect the profitability and prosperity of our national agricultural economy, and the overall U.S. economy, for years to come."

To maintain and enhance the distinct advantage the United States has over Brazil in transportation costs, ASA urged legislation authorizing and appropriating funds for lock modernization and extensions on the Mississippi and Illinois waterways that are responsible for transporting 75 percent of all U.S. soybeans exports.

ASA also said that the U.S. Government and companies holding technology patents should actively pursue all possible legal remedies to address the un-level playing field in Brazil where weak or non-existent intellectual property protection and enforcement is benefiting Brazilian growers and hurting the competitiveness of U.S. soybean producers. The combination of Brazilian growers not paying royalties on pirated Roundup Ready® Soybean seed, along with the economic benefits Brazilian growers receive from that technology, gives Brazilian growers an ill-gotten competitive advantage estimated at $20 per acre (53 cents per bushel using average yields).

ASA has sent letters to both the Commerce Department and the United States Trade Representative urging action against the unfair benefits that illegal use of Roundup Ready soybean technology is providing Brazilian farmers. In addition, ASA strongly supports Monsanto’s actions to begin addressing widespread Brazilian piracy of RoundUp Ready soybeans through a system that collects royalties on Brazilian exports of soybeans and soybean meal to countries where Monsanto has patent protection.

"ASA calls on Brazilian and international soybean traders and processors to cooperate in implementing this system," Ruth said. "Non-cooperation would perpetuate the competitive disadvantage U.S. growers and the entire U.S. soy industry face because of the ongoing theft of RoundUp Ready soybean technology by Brazilian farmers. In addition," Ruth said, "non-cooperation would continue the trade in a patented product that has been widely pirated."

In other areas, ASA is calling for increased U.S. federal soybean research funding so that U.S. soybean producers can catch up with and keep pace with their Brazilian competitors. While U.S. soybean yields are stagnant or only very slowly improving, yields as well as protein and oil content in Brazil have improved rapidly through government and private sector research, and now surpass U.S. yields and protein levels.

Ruth also told the committee that the U.S. Government should investigate the various policies and subsidies that are helping fuel the rapid expansion of crop and livestock production in Brazil, and the results of that investigation should be used to formulate appropriate U.S. policies and trade negotiating objectives. ASA commends Committee Chairman Senator Norm Coleman (R-MN) for his leadership in assessing the competitiveness of U.S. agriculture in the world market.

In addition, ASA said that protecting and enhancing U.S. domestic market demand is key for soybean producers. Whether it be maintaining a healthy and competitive domestic livestock industry, increasing domestic use through a tax incentive that allows biodiesel to be used to help meet our nation’s energy needs, or creating new soy uses, the U.S. must enhance demand here in our home market where we have the greatest competitive advantage.

"Increasing world demand through market access and income growth is a must," Ruth said. "The best way to secure worldwide income growth is through a comprehensive trade round that creates new market access opportunities."