Fuel proposal could boost soybeans

WASHINGTON, 7/17/2001(AP) - Proposals to require greater use of fuels fromsoybeans, corn and other crops could boost soybean prices by 3 percentover a 10-year period, the Agriculture Department says.``That's not a large increase, but it's something,'' said Jim Duffy, aUSDA economist who helped develop the report for Sen. Charles Grassley,R-Iowa.The report estimated net farm income nationwide would rise by an averageof $310 million a year over the decade. Net farm income this year isestimated at $35.9 billion.Legislation proposed by Senate Majority Leader Tom Daschle, D-S.D., andIndiana Sen. Richard Lugar, the senior Republican on the SenateAgriculture Committee, would require that 1.5 percent of U.S. fuel comefrom renewable sources, up from less than 1 percent currently. Vegetableoil is used to make an additive for diesel fuel.That increase would be sufficient to get the 3 percent increase in soybeanprices projected by the report, Duffy said Monday.Taxpayers would be the biggest beneficiaries of the price increaseinitially, because soybeans are currently selling for less than the pricesguaranteed by the government. When market prices rise above the federalminimum - now $5.26 a bushel - farmers will no longer qualify for asubsidy.``This report is very good news for soybean producers,'' said Grassley.``Their commodity is the basis for value-added products that increase farmincome, enhance rural communities, make America more energy-independentand clean up the environment.''