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.
  

