The American Soybean Association blasted the European Union for its trade sanctions, while calling for a retroactive extension of the biodiesel tax credit that lapsed Dec. 31, 2011, as it laid out its policy initiatives for the coming year at the 2012 Commodity Classic in Nashville, Tennessee.
The association also called for due diligence in drafting a new Farm Bill to downsize farm programs proportionately with no cuts to crop insurance, as well as calling for profiency in the review and deregulation of new biotech events.
In strongly opposing any cuts to crop insurance, ASA referred to it as the core of agriculture’s safety net. “Any cut in support for the federal crop insurance program is a potentially crushing one for our industry,” says ASA President Steve Wellman.
ASA supports a revenue-based, commodity-specific program based on the difference between historical and current-year revenue at the farm level rather than a fixed target price program.
“We recognize a revenue-based program may not be appropriate for all commodities and are open to supporting an alternative program, provided it does not interfere with the ability of producers to respond to the market or distort planting decisions,” he adds.
The issue with the EU surrounds complications with its Renewable Energy Directive—or RED. The RED requires certification that biofuel feedstocks meet arbitrary sustainability requirements under EU-approved schemes that include farm-level audits
ASA Chairman Alan Kemper says the RED also uses incorrect and outdated greenhouse gas emissions reduction values for soy biodiesel that will disqualify it from EU biofuel benefits starting next year.
“As a result of implementation to date, the RED has had a profoundly negative effect on U.S. soybean exports to the EU, which fell 41% from 2010 to 2011,” he says. “A recent study further projects that the RED will divert the remaining 2 billion dollars in U.S. soybean exports to other countries, costing our soybean farmers an estimated $270 million dollars per year.”
ASA supports negotiation of an agreement between the EU and U.S. that would certify U.S. compliance with the sustainable land use requirements of the RED, and until such an agreement is reached, the ASA is calling for an interim solution that will allow soybean exports to the EU to continue.
“While the RED is certainly a headache, the trade landscape is hardly all doom-and-gloom, and we’ve seen some real successes in the past few months that give us reason for optimism,” Kemper adds.
Free trade agreements with South Korea, Colombia and Panama represent nearly 3 billion dollars in additional ag exports, he noted. “Potential agreements like the Trans Pacific Partnership offer opportunities not only for soy exports, but also for ag sectors that demand soy inputs, like the meat and poultry industries, which consume nearly 80% of U.S. soybean meal. Last year, U.S. agricultural exports reached a record 137.4 billion dollars, and supported more than one million U.S. jobs.”
Later this month, the free trade agreement between the U.S. and South Korea will take effect, after which nearly two-thirds of U.S. agricultural exports to the country’s eighth-largest soybean export market will become duty-free, including U.S. soybeans for crushing and U.S. soybean meal. Additionally, U.S. food-grade soybean producers will have access to the market for the first time outside of the Korean State Trading Enterprise.
“The implementation of the agreement will also trigger the gradual elimination of tariffs on refined soybean oil over five years and crude soybean oil over 10 years,” Kemper says.
ASA has advocated vocally for the negotiation of the Trans-Pacific Partnership trade agreement—or TPP—a regional agreement between the United States and 10 other Pacific Rim countries. The TPP, Kemper says, will significantly improve access to foreign markets for U.S. soy and livestock products.
In addition to the current roster, ASA supports Japan’s participation in the TPP negotiations. “Japanese barriers to U.S. livestock are more restrictive than those on whole soybeans, meal and oil, and the removal of those barriers through the TPP would offer substantial new opportunities to expand U.S. exports to Japan of livestock products,” Kemper says. “Since soybean meal is a major component of feed for most livestock commodities, domestic demand for the meal would expand accordingly.”
ASA also supports an increase or sustained funding for:
- The Agriculture and Food Research Initiative.
- Farm Bill programs like the Biodiesel Fuel Education Program and the Bio-based Market Program.
- Reauthorization of the Foreign Market Development Program and the Market Access Program at $34.5 million and $200 million, respectively.
- Programs that encourage effective conservation practices on working lands and reducing the cap on acres in the Conservation Reserve Program.
- America’s waterways as key arteries through which the soybean industry moves its product to market, including the Mississippi River and key river channels.
- Reliable and modern roads and highways, as well as rail infrastructure.