CONGRESSMEN URGE U.S. SOYBEAN PROGRAM CHANGES
Several leading farm-state
Congressmen said they will press the U.S. Agriculture
Department to implement some kind of marketing loan to make
soybeans exports competitive while protecting farm income.
    Speaking at a House grains subcommittee hearing, chairman
Dan Glickman, D-Kan., proposed that Congressmen and
representatives of soybean growers meet with USDA on the
subject in the next two weeks.
    "Let's see if we can try to push them (USDA) to do
something without legislation," Glickman told the hearing.
    The current soybean loan rate effectively is 4.56 dlrs per
bushel with no income protection, or marketing loan.
    David Haggard, American Soybean Association, ASA, president
said USDA must make changes in the soybean program.
    The current soybean program "gave us the worst of both
worlds," ASA's Haggard told the hearing. The 1987 loan rate is
too high relative to corn and is encouraging an expansion of
soybean production in South America, he said. At the same time,
the U.S. soybean loan rate is too low to provide any income
support for soybean farmers, Haggard said.
    "We need some kind of market loan," he added.
    The 1985 farm bill provides authority for the Agriculture
Secretary to implement a marketing loan for soybeans but USDA
so far has resisted pressure to use the authority.
    Representatives of ASA met earlier this month with USDA,
but Haggard said USDA officials gave no indication if they
would seriously consider offering a marketing loan.
    USDA undersecretary Daniel Amstutz yesterday said the
soybean situation is a "dilemna" which has been studied
extensively by the department. But he did not say what, if any
changes, are under consideration.
    In his testimony, Haggard indicated there are ways other
than a marketing loan which should be considered to help
soybean growers, such as a so-called producer option payment,
or a direct payment program.
    Haggard said barring any program changes, Commodity Credit
Corporation, CCC, soybean stocks, now at 385 mln bu, will rise
to 500 mln by the end of August. A further 100 mln bu of
soybeans could be forfeited between September and end-year.
    "Thus, CCC could own the equivalent of Brazil's entire
soybean crop by the end of calendar year 1987," Haggard said.
    However, Haggard said that the U.S. should be cautious in
making soybean program changes that might allow the European
Community to challenge the U.S. program under the General
Agreement on Tariffs and Trade, GATT.
    He noted that The EC imports one quarter of U.S. soybean
production and loss of that market would be devastating.
    The Reagan administration has given "mixed signals" on
whether it believes a marketing loan for soybeans could be
successfully challenged in GATT by the EC, Haggard said.
    While the ASA position is to support a 5.02 dlrs per bu
loan rate combined with a marketing loan, Haggard also endorsed
a proposal by Rep. Jerry Huckaby, D-La., which would set a six
dlrs per bu loan rate and apply a marketing loan.
    The Huckaby proposal is also supported by the ranking
Republican on the House Agriculture committee, Rep. Edward
Madigan of Illinois.
    Subcommittee chairman Glickman endorsed the need to take
some action on soybeans, but cautioned that the marketing loan
could mean a substantial increase in budget costs.
    Glickman noted that the Agriculture Committee must cut one
to 1.5 billion dlrs from its fiscal 1988 budget and therefore
must fit any soybean program changes into the overall budget.
    Haggard said at a soybean loan rate of six dlrs per bu
combined with a marketing loan, the U.S. soybean price might
fall to four dlrs per bu initially. This would cost the
government a maximum of two billion dlrs. But he said the costs
would decline as market prices recovered.
 Reuter
