American Soybean Association First Vice President John Hoffman in testimony last week outlined the economic opportunities and challenges facing U.S. soybean growers called on Congress to ensure an adequate safety net for soybean farmers, which includes improving target prices and marketing loan rates for oilseed crops.
ASA also wants support for the growing U.S. biodiesel industry and an incentive for the production of soybeans with high-stability oil in the 2007 Farm Bill.
"U.S. soybean farmers support the basic structure of the 2002 Farm Bill, with some minor adjustments," Hoffman told Congress on April 25. "We believe the 'three-legged stool' that includes the marketing loan, the counter-cyclical program, and direct payments, combined with crop insurance and disaster assistance, can provide an adequate safety net for farmers in years of low prices and reduced production. However, the 2002 Farm Bill established target prices and marketing loan rates at levels that do not provide an adequate safety net for producers of oilseed crops, and are out of balance with the support provided to other program commodities."
To fix that problem, ASA proposes Congress:
Adjust target prices for all program crops to a minimum of 130% of the Olympic average of season average prices in 2000-2004. At 130%, the soybean target price would be increased from $5.80 to $6.85 per bushel. Subtracting the $0.44 direct payment, the effective target price would be $6.41.
Adjust marketing loan rates to a minimum of 95% of the same five-year Olympic price average. These adjustments would only marginally affect soybeans – the increase would only be one cent, from $5.00 to $5.01 per bushel.
On the biodiesel issue, ASA wants Congress to:
- Extend the biodiesel tax incentive which has spurred growth in the U.S. biodiesel industry.
- Authorize a Biodiesel Incentive Program under which U.S. biodiesel producers would receive a commodity reimbursement from the Commodity Credit Corporation equal to subsidies paid to foreign biodiesel exporters.
To boost commercial use of soybeans and other oils that are healthier for consumers, ASA wants Congress to authorize a Healthy Oils Incentive under which the Commodity Credit Corp. would cover up to one-third of the total premium paid to farmers by oilseed marketers for up to five years of commercialization.
For additional details, on ASA's 2007 Farm Bill proposals visit www.SoyGrowers.com/policy/2007FarmBill/ASA2007FB.PDF.