Stronger safety net needed to keep lights on in tough times

On May 2, speaking on behalf of the American Soybean Association and fellow soy growers, ASA Secretary Caleb Ragland, of Magnolia, talked about preserving crop insurance and improving the Title I farm safety net for soy. Ragland was invited to testify before the Senate Committee on Agriculture, Nutrition, and Forestry's Subcommittee on Commodities, Risk Management, and Trade, where he offered soy producers' perspectives on the farm safety net.

Ragland called crop insurance the most effective and important component of farm policy for soybean farmers, noting that, without it, "the risk would be more than many farmers and lenders could stand—it certainly would be for me."

Regarding the Title I farm safety net for soybeans, Ragland called for improvements. In a February report, USDA projected a 20.7% decline in net cash farm income in 2023 relative to 2022. This is cause for concern for farmers like Ragland, especially without a more effective safety net when faced with unexpected challenges.

While the industry has worked aggressively to build and diversify markets, China remains U.S. soy's #1 export customer, with a third of domestic beans sent there.

Ragland shared, "During the height of the trade war with China in 2018, U.S. soy stopped flowing to the Chinese market in our peak export period that fall. Soybean prices dropped significantly, but we received no PLC benefits and little from the ARC program." USDA stepped in with ad hoc, temporary support to farmers, but, he said, "the trade war that shrunk soybean demand by over 30% hardly triggered the farm safety net provided in the current farm bill, making it difficult to envision a scenario that would provide meaningful assistance without significant improvements to the current reference price and program elements of ARC and PLC."

Another challenge is the disparity in recent soybean planted acres compared to base acres, on which ARC and PLC benefits are provided. This difference impacts the accessibility and effectiveness of the farm safety net: In 2022, soybeans were planted nationally on 87.5 million acres. By comparison, soybean base totals 53.2 million acres. Over 30 million acres of soybeans were not protected by the soybean provisions of ARC and PLC in 2022.

"The land that I farm has approximately 25% base acres, which does not make me feel confident about the farm safety net available to me and the next generation," stated Ragland, who said an option to voluntarily update program acres based on a more recent historical time period would provide soybean farmers—including young and beginning farmers—greater access to the soybean safety net when combined with other improvements to ARC and PLC.

ASA released soy's 2023 Farm Bill priorities May of 2022 and urges an option to update base acres combined with other improvements to ARC and PLC for soybeans, along with protecting crop insurance and other objectives. The organization's farmer leaders are pleased to offer testimony, and ASA looks forward to continuing to work with Congress as it drafts this important legislation that will remain in place roughly the next five years.