At a hearing Wednesday, July 22, 2009 on HR 2454, the American Clean Energy and Security Act, before the Senate Agriculture Committee, United States Department of Agriculture Secretary (USDA) Tom Vilsack told committee members that the benefits of the pending climate change legislation would outweigh any burdens the bill might cause farmers. This is according to a new report on the economic impacts of the legislation issued by the USDA. To read the report from the USDA click here.
In order to gain support for the legislation from rural, Midwestern lawmakers, the Obama administration is touting a new report that focuses on the economic benefits of the bill. However, as Bill Tomson and Ian Talley point out in their article in the Wall Street Journal, farmers are still skeptical. As the Journal reports, Vilsack said the cash-credit “offset” program should make up for potential increased costs to farmers in energy, fertilizer, shipping, and other related expenses.
According to the Journal story, analysis of the legislation shows a decrease in farm income due to the bill will be initially 1%, but will eventually rise to a 7.2% decrease in farm income over time. However, the study also estimates the net returns from the “offsets” program to be $1 billion a year from 2015-2020. This will eventually rise to between $15 billion and $20 billion in 2040-2050, but the analysis does not take into account the costs of implementing the “offset” program.
The “offset” market created by the climate change legislation will give cash credits for emission-reducing programs that prevent greenhouse gases from entering the atmosphere. To read the Wall Street Journal article on the hearing click here. Or, as Dina Cappielo writes for the Associated Press, farmers will be able to sell the reductions made on their land in greenhouse gas emissions to energy companies and others required to reduce their emissions under the current legislation. To read the AP story click here.
Charles Abbott, in his story for Reuters, reports that skeptics, such as the American Farm Bureau Federation, argue that the proposed carbon “offset” market would not work for all farmers or all parts of the country. Abbott quotes Secretary Vilsack as stating, ‘“In the long term, the economic benefits from offsets markets easily trump increased input costs from cap and trade legislation.”’ Vilsack also pointed out that additional income can be achieved from entering the growing biofuels market.
Midwestern Senators Pat Roberts (R-Kansas) and Mike Johanss (R-Nebraska) tried to pin down the Secretary on how much crop land would be lost to tree planting as a result of the carbon “offset” provisions. While the Secretary could not provide an exact answer, he did indicate that some crop-land would, indeed, be lost, but he anticipates land already idled as part of the Crop Reserve program or land that is performing poorly will be the land used in this program, thus nullifying the potential for sharp decreases in operating crop land.
As Abbott reports, the answer did not satisfy Senator Johanns. Johanns is quoted in the Reuter’s article as stating, ‘“Unless you can quantify this, you can't sell the plan.”’ Johanns believes row-crop farmers would face higher energy costs with little in the bill to help them diffuse their increased operating expenses.
Committee Chairman Tom Harkin (D-Iowa) argued the bill might need what he called an ‘“off ramp,”’ to ease controls of greenhouse gases in the US if other nations fail to act on climate change. Harkin stated that three to five years ought to be sufficient time for other nations to address the climate change issue.
Environmental Protection Agency (EPA) Secretary Lisa Jackson also appeared before the Agriculture Committee too. According to the EPA, greenhouse gases from US croplands account for 6 percent of emissions while vegetables remove 1 billion tons of carbon from the atmosphere. To read the Reuters article click here. Secretary Jackson also pointed out, according to the AP, that failure to act on climate change could be detrimental to farmers in the Midwestern and Southeastern states as these areas of the country could see increased drought, insect problems, and decreases in productivity on their farm and ranchland.
Among the many issues being currently debated in the halls of congress, this is one that will surely claim the attention of the farm community as its legislative journey continues. To learn more about the legislation, HR 2454, use the following link to the Library of Congress website. To read testimony from the hearing click on the “Hearings” tab on the left Senate Agriculture Committee website.
Posted: 07/23/09
