Washington, D.C.
March 28, 2007
American Soybean Association
(ASA) President Rick Ostlie today told Members of the House
Agriculture Subcommittee on General Farm Commodities that "the
current Farm Bill doesn’t provide an adequate safety net for
oilseed producers, that the soybean target price is out of
balance with the support provided to other commodities, and must
be increased." ASA is proposing that the soybean target price be
increased to $6.85 per bushel.
The Subcommittee had asked Ostlie to provide ASA’s views on
changes needed in the Commodities Title of the 2007 Farm Bill.
During a more than year-long process, ASA collected grower input
and developed economic analysis on various farm policies.
"Oilseed producer organizations support the current structure of
the 2002 Farm Bill," Ostlie said. "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."
The problem is that the 2002 Farm Bill established a target
price for soybeans at a level that does not provide an adequate
safety net for soybean producers. The soybean target price of
$5.80 per bushel triggers counter-cyclical payments only when
season average soybean prices fall below $5.36. The difference
reflects the soybean direct payment of $0.44.
"We believe that $5.36 per bushel is inadequate in protecting
soybean producer income," Ostlie said.
ASA is proposing to adjust target prices for all program crops
to a minimum of 130 percent of the Olympic average of season
average prices in 2000-2004. This period was selected because it
includes years of both lower prices and higher prices for most
commodities. The 130 percent level was selected because it would
increase income support for all crops except cotton and rice.
Since target prices for these crops under the 2002 Farm Bill are
higher than 130 percent, they would not be affected.
At 130 percent, 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.
"Considering the target prices for other program crops, we
consider this to be an adequate and reasonable level of income
support for soybean producers," Ostlie said.
Details of ASA’s 2007 Farm Bill proposals, title by title, are
available at:
www.SoyGrowers.com/policy/2007FarmBill/ASA2007FB.PDF.
ASA is the policy advocate and collective voice of its 24,000
producer-members on domestic and international issues of
importance to all U.S. soybean farmers. |
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