Funding for export promotion programs is increased.

Annual funding is increased for the Foreign Market Development (FMD) program from $27.5 million to $34.5 million, and for the Market Access Program (MAP) from $90 million to $200 million. ASA is the largest recipient of funding under the FMD Program, and also participates in MAP. These increases will strengthen ASA’s efforts to maintain and expand foreign markets for soybeans and soybean products.

Funding is increased for food aid programs.

Total funding for the Food for Progress program is increased from $150 million to $308 million, with annual tonnage raised from the current level of about 165,000 metric tons to a minimum of 400,000 metric tons. $100 million is provided to continue the pilot program for the Global Food for Education Initiative in FY-2003. ASA has made food aid programs a priority for increasing exports of soybeans and soybean products, including soy protein.

Funding is increased for conservation programs.

The farm bill provides for $17.1 billion in conservation programs over 10 years. A new program was established to provide funding for farmers who apply conservation practices on working plans. The program is funded at $2 billion. ASA was a strong supporter of providing additional support for conservation on land in production. The Environmental Quality Incentives Program (EQIP) was funded at $9 billion with 40% of funds going to crop growers and 60% of funds to livestock producers. Producers are limited to no more than $450,000 over the six-year life of the bill. ASA also supported increased funding in EQIP especially for our customers in the livestock industries. The Conservation Reserve Program (CRP) was funded at $1.52 billion and the cap was increased to 39.2 million acres. The Wetland Reserve Program (WRP) was funded at $1.5 billion and increases the acreage cap to 2.28 million acres.

Energy

Created an energy title for the first time.

The farm bill extended the Commodity Credit Corporation (CCC) Bioenergy program for fuel producers who purchase agricultural commodities, such as soybeans, for the purpose of expanding production of biodiesel and ethanol. The program is funded at $204 million. The bill also provided $5 million ($1 million per year for 5 years) for a biodiesel education grant program. These two programs will provide need resources to the biodiesel industry. The bill also requires federal agencies to purchase bio-based products whenever practicable. The program provides $6 million for testing and other related activities. There are many soy-based products ready for procurement and will greatly benefit from this new initiative.

Soybeans are established for the first time as a program crop.

It has been clear for several years that the goal of the 1996 FAIR Act to gradually eliminate income support for program crops would not be achieved or pursued in the new farm bill. Accordingly, ASA lobbied successfully for soybeans to be treated as a program crop, eligible for benefits under the direct payment and target price income support programs as well as under the marketing loan program.

Base and yield provisions are beneficial for soybeans.

Producers who choose to maintain their current program base are allowed to include average acres planted and considered planted to soybeans in 1998-2001. For these producers, payment yields for both direct and counter-cyclical payments are backdated from 1998-2001 proven yields, to be equitable with other program crops. For producers who update their program base, counter-cyclical payments are determined on a crop-by-crop basis using the higher of a producer’s program yield, a 70% partial yield update, or 93.5% of their 1998-2001 proven yield. This provision benefits soybeans and other crops that have seen significant yield improvement since 1985. ASA strongly supported these provisions.

Soybeans receive more equitable income support.

Income support for soybeans in the new bill includes a $5.00/bu. marketing loan, a $0.44/bu. direct payment, and a $5.80/bu. target price. Based on 85% of eligible base acres and on payment yields (above), the effective level of income support for soybeans is $5.59/bu. compared to $5.26/bu. under the FAIR Act. For a 2.9 billion bushel crop, this additional $0.33/bu. increases current support, which totaled $3.28 billion in 2001, by an additional $950 million per year.

Payment limitations will not restrict program benefits.

The new bill establishes limitations of $40,000 on direct payments, $65,000 on counter-cyclical payments, and $75,000 for marketing loan benefits. Spouses will also be eligible for payments under these limits, for a total of $360,000 per farm. In addition, the bill provides continued authorization for commodity certificates, which effectively eliminate the cap on loan benefits, and for the three-entity rule. ASA strongly opposed tightening payment limitations.

Soybean supports will be less trade-distorting under the WTO.

The new farm bill reduces the soybean marketing loan rate by $0.26/bu. from its level in 1998-2001, and provides soybean producers an effective decoupled direct payment of $0.30/bu. These changes reflect ASA’s decision to redirect support that is considered production and trade distorting under the WTO to a program that is exempt from WTO discipline. In addition, the counter-cyclical payments to be made under the target price program are decoupled from current year production decisions. ASA will be better able to defend soybean support programs against competitor trade complaints, and to insist on reductions in trade-distorting domestic support provided by the EU and other countries.

For more information, visit SoyGrowers.com.