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Ag Secretary sees gains for most farmers in House climate bill

Agriculture.com Staff 12/02/2009 @ 2:15pm

Agriculture Secretary Tom Vilsack on Wednesday summarized the USDA's latest analysis of a cap and trade bill passed by the House last summer as positive for most farmers, including livestock producers.

"I think there's a real opportunity for agriculture," Vilsack said in a telephone press conference.

The latest study, which USDA's Chief Economist Joseph Glauber presented to a House Agriculture subcommittee later in the day, shows energy costs rising modestly for all of agriculture during the first four years after the law would take effect, from 2012 to 2018.

Agriculture itself isn't capped under the House bill, so it wouldn't have to buy carbon offsets. But other industries that supply inputs and fuel to farmers would, causing fuel prices to rise. Increases in fertilizer costs would be small, since the bill delays the effects of cap and trade on the fertilizer industry until after 2025.

USDA projects average annual changes in fuel costs to rise between 2.6% and 5.3% from 2012 to 2018, compared to where they would be without the legislation. And fertilizer costs would go up by an additional 0.3% to 1.7% each year.

The analysis also looks at the effects by crops. Corn, one of the most energy-intensive crops grown in the U.S., would see costs increased by $1.44 an acre, if the USDA uses EPA estimates of changes in energy costs. They would rise an added $4.72 an acre using different data from the Department of Energy.

The estimates of increased energy costs ignored potential benefits that farm owners will get from selling carbon credits, mainly through increased tree plantings. That would bring an added $22 billion a year into the ag sector of the economy, a 12% increase over projections without any cap and trade legislation.

Vilsack said the results of the USDA analysis are similar to those of a study done by the University of Tennessee for 25 by '25, a group promoting renewable energy.

The study doesn't include possible benefits for agriculture from increased use of biofuels that would be encouraged by cap and trade, Vilsack said. And agriculture isn't going to benefit from the status quo, either, because relying on imported fuels is likely to make energy costs go up. Climate change itself could make raising livestock and crops more difficult, he said.

Vilsack is one of several cabinet members who will be traveling to Copenhagen, Denmark for the U.N. Climate Change Conference.

Vilsack said he doesn't think the meeting will be affected by a controversy in the climate science community dubbed Climategate by the media. E-mail messages from British climate researchers that were critical of climate change doubters in the scientific community were leaked, resulting in accusations that they tried to suppress the debate over human influence on climate.

"The reality is that the vast, vast majority of scientific information suggests there are indeed changes taking place in climate," Vilsack said. Agriculture has the potential to be part of the solution to climate change because of its ability to capture greenhouse gases, he said. In the U.S., agriculture accounts for 7% to 10% of emissions but could capture 20% to 25% by sequestering carbon.

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