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Safety net not equitable : ASA says House ag bill hurts soybeans

American Soybean Association leaders are calling on the Senate Agriculture Committee to reject the House Agriculture Committee's Farm Security Act of 2001 and write a new farm bill “that is not tied to outdated bases and yields.”

Writing in its monthly newsletter, ASA Today, ASA representatives said the fixed payments, target prices and payment yields included in the House bill do not provide soybean farmers with an equitable safety net and encourage the production of crops already in greater surplus than soybeans.

For openers, the Association said the House bill reduces the marketing loan rate for soybeans 34 cents per bushel (from $5.26 to $4.92). Based on a 2.8-billion-bushel crop, it said, the bill would cut income support for soybean producers by $952 million.

“We are concerned that this farm policy would negatively affect soybean production at a time when domestic and world demand for soybeans is rapidly expanding,” said ASA president Bart Ruth. “Our growers look forward to working with the Senate Agriculture Committee to develop a counter-cyclical income support program that is not tied to outdated bases and yields.”

Both ASA and the National Corn Growers Association have stepped up their criticism of the House Ag Committee bill in recent days. The NCGA has said it will not endorse the House bill “because it was written with a fundamental bias against corn and soybean farmers.

“The House bill provides that producers of traditional program crops, like corn, receive their current loan rates, the target prices they had prior to 1996 and their 2002 Agricultural Marketing Transition Act (AMTA) payment,” the ASA said.

“Producers would have a one-time option to update their base to the 1998-2001 period and to include oilseed crops as part of their income support under the bill.”

It noted that oilseeds have never been classified as a program crop like cotton or corn and are not eligible for AMTA payments to support farm income. “In place of other benefits, oilseed producers have depended on the marketing loan program,” the newsletter said.

“They have received an oilseed payment as part of the Market Loss Assistance provided in the last two years, but it has been less on a per bushel basis than the supplemental AMTA payments made to program crop producers.

“The House bill's soybean target price of $5.86 per bushel and fixed payment of 42 cents per bushel are significantly less than levels justified by the historical price relationship between soybeans and other program crops,” the newsletter said.

“Based on the corn target price of $2.78 per bushel and fixed payment of 30 cents per bushel, a very conservative 2.3 to 1 soybean-to-corn ratio would justify a soybean target price of $6.39 per bushel and a fixed payment of 69 cents per bushel.”

ASA said it had also asked the House Agriculture Committee to establish a minimum funding level of $43.25 million for the Foreign Market Development Program and increased funding for the Food for Progress programs. The committee approved $35 million per year for the FMD program through 2011.

“ASA is working with key senators and other farm organizations to ensure the Senate farm bill treats soybeans equitably,” the ASA said. “ASA opposes providing income support using the old target price bases and yields, which disadvantage crops that have increased acreage and productivity during the past 20 years.”

Although the newsletter did not mention cotton or rice, National Cotton Council officials have noted that both the soybean and corn groups seem to have been afflicted by a case of “farm-bill envy,” given that both the chairman and the ranking minority member of the House Ag Committee are from districts with high percentages of cotton acres.

Some observers say such criticism by groups like the ASA, which has only one southern representative on its executive committee, could turn the farm bill debate into a North-South battle.


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