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ASA wants fairer loan rates in 2007 farm bill

Agriculture.com Staff 02/12/2007 @ 12:48pm

The American Soybean Association is not yet supporting a National Corn Growers proposal to transition commodity programs to a revenue-based farm income safety net, leaders of the group said Monday.

Instead, ASA is putting its emphasis on getting marketing loans and target prices rebalanced so that farm programs have a neutral effect on growers' planting decisions, the group's president, Northwood, North Dakota, farmer Rick Ostlie, told reporters.

ASA has questions about whether or not a revenue assurance program would meet World Trade Organization limits on price-distorting farm program payments, as well as the cost of the program. Ostlie said his group has been meeting regularly with NCGA and other commodity groups to share farm bill ideas.

"We've been doing a lot of discussion back and forth. I think the Corn Growers proposal is a very interesting proposal but there are a lot of unanswered questions yet," Ostlie said.

The ASA wants loan rates and target prices in the 2007 farm bill to be based on an Olympic average (throwing out low and high years) of 2000-2004 season average prices. Marketing loan rates would be 95% of that average and target prices would be 130%. For beans, that would be a loan rate of $5.01 per bushel (up from $5 under the current farm bill) and a target price of $6.85 per bushel. (above the current $5.80).

Ostlie said that change is estimated to cost the USDA an additional $890 million a year over projected costs for the 2007 Farm Bill, and that it would cost less than the NCGA proposal.

Under the ASA proposal, the loan rate for corn would also go up slightly, from $1.95 per bushel. To $2.01 per bushel. And the corn target price would increase to $2.75 from $2.63. Cotton and rice loan rates and target prices would stay the same.

Ostlie said that if the ASA can't get loan rates and target prices rebalanced, the group would consider backing a revenue-based program. But ASA believes there is already strong support in Washington, DC, for rebalancing loan rates and target prices.

The American Soybean Association is not yet supporting a National Corn Growers proposal to transition commodity programs to a revenue-based farm income safety net, leaders of the group said Monday.

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