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Mahamad Rodzi Abdul Ghani




Mahamad Rodzi Abdul Ghani






Soybean rust (Phakopsora pachyrhizi) is a fungal disease that attacks thefoliage of a soybean plant causing the leaves to drop early, whichinhibits pod setting and reduces yield. The amount of damage depends onhow early in the growth of the soybean plant the infection occurs.

Soybean rust is not present in the continental United States. It has beenpresent throughout Asia and Australia for decades. In 1996, the diseasemoved from Asia into Uganda and spread throughout much of Africa by 2002.In 2001, soybean rust was found in South America and has spread throughthe soybean growing areas of Brazil, Paraguay, and Bolivia. It also spreadto a northern, non-soybean growing area of Argentina in 2003.

The disease has the potential to very negatively affect the U.S. soybeanindustry. With possible yield losses of up to 80% or more, doing all thatcan be done to prevent the introduction of soybean rust into the UnitedStates, along with preparing for an outbreak is one of the most pressingissues facing farmers this year.

Soybean rust spores are easily transported in air currents and spreadrapidly over wide distances. Limited data is available on how long sporescan survive; studies have shown that under the right circumstances, sporescan be viable for more than 50 days.

No U.S. cultivars have shown resistance to soybean rust. Three fungicidesare currently approved for use on soybean rust; seven other chemicals arepart of a Section 18 quarantine request now under review by EPA. Fungicidemanufacturers have indicated that there would not be enough fungicideavailable to treat a nationwide outbreak of soybean rust in 2004.

Soybean check-off and government-funded research activities are underway,mostly at Ft. Detrick, Maryland. Some research is conducted at otherAgricultural Research Service (ARS) facilities and collaboration isongoing with several other countries. However, more Federal researchdollars urgently are needed for soybean rust given the large economicimpact soybean rust would have on farmer income and crop production in theUnited States.


The combination of near-record U.S. soybean exports to date, continueddomestic demand for both soybean meal and soybean oil, and adrought-reduced 2003 U.S. soybean supply provide the potential for limitedsoybean meal and possible whole soybean imports in the latter half of 2004to meet domestic livestock demand before U.S. supplies are replenishedwith the harvest of the 2004 U.S. soybean crop. USDA projects 2003/04 U.S.soybean ending stocks to be 125 million bushels the lowest in nearly 30years. USDA’s stocks-to-use ratio suggests that total ending stocks willfall to less than 18 days of use by August 31, 2004 the lowest level onrecord.

These figures have analysts projecting that imports will be needed tosustain and feed the U.S. livestock demand base. USDA’s January 2004Supply & Demand Estimates raised projected U.S. soybean meal imports from310,000 metric tons to 430,000 metric tons. On the question of wholesoybean imports, U.S. soybean processors have shown interest in importingsoybeans to keep U.S. crushing plants open and meet the demand for bothsoybean meal and soybean oil from their livestock and edible oilcustomers. USDA’s January estimates project only 8 million bushels ofsoybean imports, up only slightly from 5 million bushels imported lastyear. Traditionally, most soybean imports are from Canada as part oflimited cross-border trade.


Given the near certainty of soybean meal imports, and the potential forsoybean imports, ASA is working closely with APHIS to develop protocolsthat will prevent the accidental introduction of soybean rust from anyimports of soybean meal or soybeans. Last year ASA worked with APHIS torequire that Brazilian soybean meal imported into Wilmington, NC, had beenprocessed, heat-treated, and handled in such a manner as to eliminate thepossibility of any potential viable soybean rust spores being present.

ASA and APHIS share the goal of developing procedures that will protectthe United States while ensuring that the procedures are science-based.ASA is adamant that the risk assessment procedures must be based on goodscience because the U.S. exports more than 1 billion bushels of soybeanseach year and U.S. growers would not want other countries to erectnon-scientific barriers to trade. As global exporters, it is in our bestinterest to have plant protection measures around the globe that aregrounded in science because we also have to live with such measures toreach our international customers.

While ASA would prefer to meet all domestic demand without imports, thedrought-reduced 2003 soybean crop will not allow this. Even with 430,000metric tons of projected soybean meal imports, USDA’s January estimatesshow domestic meal use declining over 4% from year-earlier levels as tightsupplies and higher prices ration demand. U.S. soybean growers need U.S.livestock demand to be robust when growers harvest the 2004 U.S. soybeancrop. It is not in U.S. growers’ interests to choke-off this livestockdemand in the short-term, or to encourage livestock operations to locateoffshore in the long-term via ill-considered import restrictions that aren’t supported by science.

From risk assessment information APHIS has shared with ASA, soybean mealcan continue to be imported under the proper protocols without risk ofintroducing soybean rust into the United States. Whether commoditysoybeans can be imported safely and with what safeguards in place is lessclear. ASA is actively working with APHIS to ensure that the U.S. soybeanindustry is fully protected from the accidental introduction of soybeanrust via imports.


Soybean rust reduces yields and raises production costs for soybeans inevery major production region of the world except the United States. Butthe recent and rapid spread of the pathogen in South America raises theprospect of its windborne entry into the U.S. as well, with a range ofpotential economic and policy implications. A new analysis conducted byEconomic Research Service (ERS) demonstrates that, while soybean producersand consumers do realize some new costs as a result of soybean rust, theU.S. agricultural sector as a whole is minimally affected after adjustingto the presence of this new pest. Such resilience, seen in response topast shocks to the agricultural system, is explained by the availabilityof substitute crops (in production) and commodities (in consumption), aswell as the technological savvy to mitigate pest losses. Economic andPolicy Implications of Wind-Borne Entry of Asian Soybean Rust into theUnited States quantifies the potential economic impacts in the UnitedStates in both the first year of soybean rust's entry and subsequentyears when producers have adapted to this new pest.


a. Economic Research Service (ERS) consulted with several USDA agenciesand university scientists to obtain the best biological intelligence onsoybean rust (SBR) and the Brazilian experience with the pathogen. Thismultidisciplinary effort helped establish reasonable assumptions aboutthe production implications of SBR entering the U.S. Specifically, the ERSanalysis:

i. Assumed U.S. soybean producers would experience an averageproduction cost increase of $25/acre, representing one to two newfungicide applications.

ii. Simulated several yield-change scenarios to describe potentialinfestation severity of SBR outbreaks ranging from a 9.5-percent loss inyield to a 0.9-percent increase. (Fungicide treatments can also controlother diseases that reduce yield but are not profitable to manage in theabsence of SBR).

b. Both first-year and medium-term effects (3-5 years beyond initialestablishment) are analyzed in the scenarios.

c. Estimated SBR yield and production cost impacts per acre are fed into aspatial equilibrium model for U.S. agriculture to simulate economiceffects.

d. Equilibrium economic impacts, after acreage and market adjustments,were estimated for the medium term by:

i. Specifying three scenarios describing the potential extent ofpost-establishment SBR infestation for any given year:

a. Only Appalachia, Southeast, and Delta regionsconducive to infection;

b. Appalachia, Southeast, Delta, Corn Belt, andNortheast conducive to infection;

c. All soybean production regions conducive toinfection.

ii. Defining all three scenarios by infestation severity, fungicidecost, and infestation extent.


a. In the first year of SBR infestation, assuming that U.S. producers areable to treat with fungicides upon SBR detection, the expected value oflosses (given that a rust outbreak occurs) across all U.S. agriculturalproducers and consumers would range from $640 million to $1,341 million,depending on the severity of infestation.

b. These losses, which represent less than 1 percent of net economicbenefits derived from agricultural activity, demonstrate the flexibilityand resilience of the U.S. agricultural system as a whole.

c. In the medium term, for all the yield loss scenarios:

i. Soybean acreage declines in the most susceptible, higher cost soybeanproduction regions, and is supplanted by alternative crops (largelycotton in Southern regions).ii. Soybean acreage increases in regions less susceptible to SBR (SouthernPlains, Northern Plains and Lake States).iii. Acreage increases do not offset acreage declines; U.S. soybeanacreage declines and U.S. soybean prices increase.

d. In the medium term, average annual economic losses are between $240million and $2.0 billion, depending on the severity and extent of annualoutbreaks:

i. For the low-extent scenario, net returns to soybean production declinein regions that are prone to rust infestation, such as the Southeast,Delta, and Appalachia. Producers in these regions increase production ofother crops such as cotton and rice. Net returns to soybean productioncould increase in regions less susceptible to rust.

e. In neither the first year nor the medium term do soybean producers bearall of the costs of adjusting to soybean rust. Depending on the severityof annual outbreaks, soybean producers shoulder 60 to 70 percent of totallosses, with U.S. consumers and livestock producers bearing the rest.


a. Agricultural producers and consumers could benefit (i.e., economic lossprevented) by as much as $67 million for each 1 percent of soybean yieldloss avoided through development of more tolerant soybean cultivars, newfungicides, or more effective timing and application of fungicides. Overtime, technological innovations spurred by the new soybean productionenvironment may further soften the blow of soybean rust.

b. Yield and revenue insurance premium schedules may have to be revised inregions susceptible to periodic rust outbreaks. Changes in coverage, andassociated production risks, could force producers to alter cropproduction and insurance decisions.

c. Environmental changes accompany changes in acreage, regional croppingpatterns, and input use associated with rust outbreaks. The quantity ofpesticides discharged into the environment is expected to increase withthe augmented use of fungicides to treat infected soybean acres. Based oncurrent and projected fungicides available to combat SBR, pesticide use(measured in active ingredients) is expected to increase by 0.1 to 0.2pounds pertreated soybean acre.

d. The U.S. agricultural sector exhibits tremendous resilience, even whenit is buffeted by large yield or production cost shocks affecting a keyagricultural commodity, such as soybeans. This resilience springs fromthe availability of substitute crops in regions where soybean rust ismost severe; the availability of alternatives to soybeans/soybeanproducts as soybean prices increase; and the availability of inputs andtechnologies to limit economiclosses.

Although this is bad news to Soybean , this is GOOD news to Palm oil. Wecan expect Palm Oil pricesto remain bullish.