WASHINGTON, U.S. 4/1/2002 (The Associated Press) -The AgricultureDepartment is deciding whether to make a cut in the subsidy rate forsoybeans that could anger farmers but save taxpayers as much as $1 billionor more.Government studies say that the subsidy rate for soybeans is too highrelative to other crops and is encouraging farmers to grow too much soy.Last year, farmers harvested 74 million acres of soybeans, 11 million morethan in 1996, when the subsidy rate, or ``loan rate,'' was raised to $5.26per bushel. It has not been changed since.``There is an incredible disparity between what the market is signalingand what the loan rate is signaling,'' said Keith Collins, USDA's chiefeconomist.USDA spokeswoman Alisa Harrison said Thursday that the department willannounce a decision on 2002 subsidy rates sometime this month.Representatives of soybean growers have met at least twice withAgriculture Secretary Ann Veneman in recent weeks to urge her not to lowertheir subsidy rate. Under the 1996 farm law, USDA could cut the rate aslow as $4.92 per bushel, which would save the government more than $1billion.Soybeans are a major crop in several states likely to have close Senateelections this year, including Arkansas, Iowa, Minnesota and South Dakota.Those races could decide which party controls the Senate in 2003.``It is extremely important to soybean producers that that source ofrevenue and income protection stay there,'' said Bart Ruth, a Nebraskafarmer who is president of the American Soybean Association.The government guarantees farmers a minimum income for grain, cotton andsoybeans by providing subsidies when market prices fall below a fixedlevel. Soybeans were selling for more than $7 a bushel in the mid-1990s,well above the $5.26 subsidy rate, but have since dropped to nearly $4.The subsidy rate for corn is $1.89 per bushel, while market prices areslightly over $2, so growers receive no payment for that crop.USDA has paid about $4.5 billion in subsidies on all 2001 crops, with $2.7billion of that going to soybeans alone.A 1999 study by the General Accounting Office said that the subsidy ratefor soybeans would cover about 250 percent of the cost of growing them,while the corn rate would cover about 150 percent of the cost of producingthat crop.Soybean growers insist there would be plenty of demand for their crop, ifthe dollar wasn't as strong as it is. A strong dollar makes U.S. cropsmore expensive than those from countries such as Brazil that have weakercurrencies.In a letter to Veneman this week, Senate Agriculture Committee ChairmanTom Harkin, D-Iowa, warned her against making what he said was a rumoredreduction of $500 million in soybean subsidies. ``Clearly this is not atime when farmers are in a position to absorb further losses in income,''he said.Lawmakers are considering cutting the soybean subsidy rate as they makerevisions in the 1996 farm law. Soybean acreage would in turn becomeeligible for other types of payments it doesn't receive now.