The American Soybean Association (ASA) is pleased that the United States Senate Committee on Agriculture, Nutrition, and Forestry has scheduled a mark-up to consider their proposed Farm Bill for tomorrow, but is raising several concerns about policy priorities in the proposed bill, and with the level of support provided for key soybean programs.

"ASA commends the efforts of Chairman Tom Harkin and Ranking Member Saxby Chambliss to develop a new farm bill that responds to the changing needs of farmers, ranchers, and others in America who will benefit from various provisions of this omnibus legislation," said ASA President John Hoffman, a soybean producer from Waterloo, Iowa. "However, there are several areas of major concern to soybean producers that need to be reconsidered or eliminated."

First, the bill reduces baseline spending under the Commodities Title by about $3.0 billion, which is reallocated to other titles. ASA and other farm organizations have consistently opposed shifting funds out of farm programs. At the same time, the proposed bill establishes the soybean target price under the traditional farm program at $6.00 per bushel, well below ASA’s original proposal of $6.85, based on equity with other program crops.

"ASA does not believe that a $6.00 target price provides an adequate income safety net for soybean producers or a level of equity with other program crops," Hoffman said. "We believe the soybean target price needs to be increased to a minimum of $6.30 per bushel, and wish to work with Senators Harkin and Chambliss, and other Committee members, to increase the target price to this level either in mark-up or in Conference."

A second concern is with the introduction of the recourse loan in farm policy under the proposed Average Crop Revenue (ACR) program.

"ASA does not believe whatever benefit the recourse loan may provide as a financing tool outweighs the very negative precedent its introduction would represent as an alternative to the marketing loan program," Hoffman said. "ASA recommends that the recourse loan provision in the ACR program option be eliminated."

ASA is also concerned with the proposed requirement that producers relinquish beneficial interest in their commodities in order to receive a Loan Deficiency Payment (LDP) under the marketing loan program. The LDP was developed as a "short cut" for realizing a Marketing Loan Gain without requiring producers to take out and repay loans. There would be no saving from eliminating the LDP option, and it would force all producers to take out and repay loans when prices are below the loan rate for their commodities.

"This would be costly and cumbersome for the Farm Services Agency to administer, and could cause unnecessary difficulties in the timely and efficient operation of the marketing loan program," Hoffman said.

In the Energy Title, ASA is very concerned with the level of funding provided for payments to domestic biodiesel producers under the Bioenergy Program for Advanced Biofuels. Biodiesel producers have seen prices for their feedstocks, including soybean oil, more than double in the past year as aggressive policies to raise ethanol production have shifted nearly 12 million acres from soybeans to corn this year. As a result of higher feedstock costs, the biodiesel tax credit is not sufficient to ensure competitiveness of domestic biodiesel in the U.S. market.

"An additional payment is essential to ensure the viability of our fledgling domestic biodiesel industry in the current volatile energy market," Hoffman said.

Unfortunately, the funding level provided in the proposed bill would not allow a payment sufficient to make domestic biodiesel competitive. Also, and for the same reasons, the proposed bill should provide payments on all biodiesel production, as has been done in the past, not on incremental production. In addition, the proposed requirement that biodiesel producers choose between biodiesel payments under the Bioenergy Program and the small biodiesel producer tax credit would be a disincentive for start-up biodiesel companies, and should be eliminated.

ASA is pleased the Committee bill authorizes the Quality Incentive Program, which will encourage the production of soybeans and other oilseeds with high-stability characteristics that will enable food companies to eliminate trans fats without increasing the use of unhealthy saturated fats. ASA is asking the Senate Committee to work with their House counterparts in Conference to provide funding for this Program in order to ensure timely and effective implementation.

"ASA strongly supports enactment of a new farm bill this year, and will continue to work with the Committees and their staff to ensure its timely completion," Hoffman said.