Cap-And-Trade Splits U.S. Agriculture
MARGERY A. GIBBS Associated Press Writer - September 1, 2009
OMAHA, Neb. (AP) — Legislation to confront climate change could be an economic godsend to farmers and ranchers. Or it could be an enormous financial burden.
It depends on whom you ask, and not even farmers and ranchers agree on the matter.
Those who are against the bill say it would lead to skyrocketing fuel and fertilizer costs, cutting into farmers' and ranchers' already unpredictable profits. Those who support it contend any losses would be more than made up for through a provision that would allow companies to meet their pollution targets by investing in offset projects, such as farms that capture methane or plant trees.
The legislation would cap emissions from major industrial sources, including power plants, factories, refineries and electricity and natural gas distributors. Emissions from agriculture would be excluded.
A U.S. Department of Agriculture report concluded that if the proposal passed, farmers and others in agriculture could see an initial 1 percent to 7.2 percent loss in income due to increased costs in energy and, therefore, fertilizer — which requires a great deal of energy to be produced. Those losses would be far outweighed by the tens of billions of dollars farmers are expected to rake in for projects to reduce greenhouse gases in years to come, the report said.
But Sen. Mike Johanns, R-Neb., said the report is incomplete and believes the USDA rushed the study to address senators' concerns after the House passed its bill in June. The Senate is expected to vote this fall.
"We still have a question about how is this going to impact livestock, corn, soybeans and wheat in our state," said Johanns, who was agriculture secretary from 2005-2007 under President George W. Bush. "This makes no sense to me whatsoever. Why would the leadership of the House ... put a bill out when they hadn't had analysis on the ag sector? That not only impacts farmers and ranchers, it impacts consumers."
However, the National Farmers Union backs the legislation, provided the USDA administer the agriculture offset program and that those already practicing carbon-reducing techniques be rewarded for their efforts.
"These guys that are screaming that it's going to drive costs through the roof ... all of the credible economic research that's been done really disproves that," said National Farmers Union president Roger Johnson.
He also said that energy costs could soar even without the legislation and noted that global warming could wreak havoc on the food supply.
"All of the climate change research says we're going to see more flooding, we're going to see more droughts, we're going to see higher temperatures, we're going to see more pests, we're going to see more diseases," he said. "All of these things are going to require significant adaptation cost increases for agriculture."
Other farm groups share Johanns' view on the legislation, as do a number of farm-state lawmakers in Iowa, Kansas, Missouri and South Dakota. Leaders in Southern energy-producing states, such as Virginia, West Virginia and Kentucky, also have voiced concern that their coal and natural gas industries will be hurt.
The American Farm Bureau Federation has denounced the legislation as an energy tax in disguise, saying energy costs alone could spike well beyond the 20 percent estimated by the federal government.
Sen. Pat Roberts, R-Kan., said the USDA report grossly underestimated the increases in natural gas and fertilizer costs likely to be sparked by the climate legislation.
"This bill puts a chokehold on the local economy," Roberts said. "Bottom line ... this bill is a wet dog that is not welcome in any farm or ranch house."
Don't tell that to Conde, S.D., cattle producer and grain farmer Doug Sombke, who has been employing environmentally friendly techniques like no-till planting for more than a decade on his 2,500-acre operation.
"People are so afraid of this energy cost thing; that just amazes me," Sombke said. "In the last two years, we've still seen energy costs go up, and not just the 15 or 20 percent like they're predicting. We've seen it go up 200 percent.
"We survived that; we'll survive this small increase."
On the other side of the debate is Sallie Adkins, who owns a 15,000-acre ranch with her husband near Halsey in the Nebraska Sandhills.
"I just think the major concern in agriculture today is how we can keep our cost of production affordable to stay in business and still be competitive with other markets," she said.