American Soybean Association (ASA) President Mark Berg today announced that certain aspects of the Climate Change Treaty negotiated in Kyoto, Japan, raise immediate concerns for U.S. soybean farmers. "My concerns are that the Treaty fails to require developing countries to reduce or restrict their greenhouse gas emissions," the ASA President said. "As energy-based input costs to U.S. farmers increase, we will become less competitive with producers in South America, India, Malaysia, and elsewhere. In addition, any benefits resulting from reduced emissions in developed countries could be negated by increased fossil fuel use in developing countries," Berg stated.

A major concern is the impact of the Treaty’s emissions reduction requirements on the cost of production of U.S. farmers. Studies currently available suggest that higher costs of agricultural inputs resulting from implementation of the Treaty -- particularly for fertilizer, fuel, and pesticides -- could reduce net farm income in the United States by 24 to 46 percent. Also, higher energy costs would negatively impact the U.S. transportation and processing sectors, further eroding agriculture’s international competitiveness. Administration officials have stated that, while initial efforts will focus on reducing emissions through incentives to industry, it may be necessary to impose new energy taxes or reduce current energy tax benefits to attain the final U.S. emissions targets.

"We understand the Administration does not intend to submit the Treaty to the Senate for ratification until various changes can be negotiated, including the participation of developing countries," Berg said. "After the current industry review is completed, ASA will be willing to reconsider its position based on any future amendments. However, ASA will not support the Climate Change Treaty as currently proposed, or any international agreement that would have the effect of making U.S. farmers less competitive in domestic and world markets by increasing production and marketing costs," Berg added.

The American Soybean Association Board of Directors has initiated a review of the Climate Change Treaty. Prior to finalizing a position on the Treaty, ASA will thoroughly evaluate the assumptions on which it is based, including the linkage between green house gas emissions and global warming.

Soybeans were planted on 26 percent of all U.S. crop acres in 1997. USDA estimates that the value of 1997 U.S. soybean and soybean product exports will exceed $11 billion, the highest value of any agricultural product category, accounting for nearly 19 percent of total U.S. agricultural exports that are projected to reach $58.5 billion. These agricultural exports positively contribute to the United States trade balance.