ASA Raises Concerns About Farm Bill Priorities

from American Soybean Association press release:

...In the Energy Title (of the Senate's proposed Farm Bill), ASA is very concerned with the level of funding provided for payments to domestic biodiesel producers under the Bioenergy Program for Advanced Biofuels. Biodiesel producers have seen prices for their feedstocks, including soybean oil, more than double in the past year as aggressive policies to raise ethanol production have shifted nearly 12 million acres from soybeans to corn this year. As a result of higher feedstock costs, the biodiesel tax credit is not sufficient to ensure competitiveness of domestic biodiesel in the U.S. market.

"An additional payment is essential to ensure the viability of our fledgling domestic biodiesel industry in the current volatile energy market," Hoffman said.

Unfortunately, the funding level provided in the proposed bill would not allow a payment sufficient to make domestic biodiesel competitive. Also, and for the same reasons, the proposed bill should provide payments on all biodiesel production, as has been done in the past, not on incremental production. In addition, the proposed requirement that biodiesel producers choose between biodiesel payments under the Bioenergy Program and the small biodiesel producer tax credit would be a disincentive for start-up biodiesel companies, and should be eliminated.

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