USDA says it will wait to see whether Congress enacts a new farm bill before announcing the soybean loan rate for the 2002 crop.

The announcement is seen as a sign that farmer indignation over its delaying tactics on the farm bill last month may be finally beginning to register with Bush administration officials.

“We feel it is prudent and responsible to wait to announce loan rates until the intent of Congress becomes more clear to avoid confusion for farmers,” said Agriculture Secretary Ann Veneman in a statement released by USDA.

“We urge the Senate upon its return to work in a bipartisan manner to complete a farm bill that is fair, responsible and helps a broader range of producers,” she noted. “If it appears the Congress will not complete a farm bill in time for this year's crops, we then will make the determinations and announcement.”

The statement also came amid reports that USDA officials were considering reducing the 2002 soybean loan rate below 2001's $5.26 per bushel.

During the Senate farm bill debate, administration officials first supported a bill authored by Sen. Richard Lugar, R-Ind. Then, they endorsed the Cochran-Roberts amendment authored by Republican senators from Mississippi and Kansas. Both proposals failed.

Senate Democrats finally gave up passing their version of a farm bill when a third effort to cut off debate on the bill failed to receive the required 60 votes just before Christmas.

Throughout the debate, Veneman and other administration officials criticized the House and Senate leadership for attempting to rush a new farm bill into passage when the current law does not expire until this fall.

Any lowering of the soybean loan rate will reduce farmer income because of the impact on loan deficiency payments or LDPs. Some USDA officials reportedly favor some reduction because of the belief that the soybean loan rate is too high in relationship to other program crops.

After the Senate failed to pass a farm bill on Dec. 17, American Soybean Association officials urged USDA to announce that the soybean loan rate for 2002 would be unchanged from the current rate.

“With no certainty that the next farm bill will be in effect for 2002 crops, farmers and their lenders need to know as soon as possible what next year's farm program will be under the final year of the Federal Agricultural Improvement and Reform Act,” said ASA President Bart Ruth.

Ruth noted that ASA had requested an announcement of the 2002 loan rate back on Oct. 17 and again during a meeting with USDA officials on Oct. 30. Undersecretary of Agriculture J.B. Penn said then that an announcement would be made in early December.

“It is now two months since we raised this issue, and the promised announcement by the Department is overdue,” said Ruth, a soybean farmer from Nebraska.

Ruth said it's possible that Congress could pass farm bill legislation acceptable to the administration in time for the 2002 crop. “It is also possible that legislation will not be completed until later in the year and that the FAIR Act will remain in effect for the 2002 crops.”

In either case, Ruth urged Veneman not to make any of the cuts in the loan rate that are reported to be under consideration at USDA. (Those reportedly range from 10 cents to 15 cents per bushel.)

“With soybean prices at historically low levels and with the massively devalued Brazilian real continuing to distort soybean production and trade, this is not the time to undercut the only income protection provided to U.S. soybean producers,” he noted.

Both the House and Senate Agriculture Committee farm bills would lower the soybean loan rate, but would offset the decrease with direct payments (42 cents in the House bill and 55 cents in the bill authored by Sen. Tom Harkin, D-Iowa).

Shortly after ASA officials repeated their call for a loan rate announcement, Harkin wrote to Veneman warning her not to tinker with the soybean loan rate.

“Clearly, this is not a time when farmers are in a position to absorb future losses in income,” he said, referring to reports of a possible $500 million in savings from dropping the soybean loan rate to $5.09 per bushel.

e-mail: flaws@primediabusiness.com.