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Vilsack's pitch for global warming legislation meets cool weather in Iowa

Agriculture.com Staff 08/19/2009 @ 3:03pm

Secretary of Agriculture Tom Vilsack got a brief standing ovation when he walked into a sale ring at the Iowa State Fair cattle barn Wednesday.

It was another stop on the Obama Administration's "rural tour,' and once again, the former Iowa governor was reminded of tough times in the hog and dairy industries by farmers and their leaders including Craig Lang, president of Iowa Farm Bureau, and Chris Peterson, head of the state's Farmers Union.

Lang said the state's hog and dairy producers are telling him they can survive if given help to get through the current crisis. Vilsack told him the USDA has stopped foreclosures on farm borrowers from the Farm Service Agency and is reviewing the loans. FSA is looking for ways to restructure loans of other borrowers. And next week USDA will host a conference call with commercial lenders to urge them to work with troubled borrowers.

When Petersen said he's concerned about the effects of vertical integration on competition within the hog industry, Vilsack said USDA's Grain Inspection, Packers and Stockyards Administration will issue new rules on the Packers and Stockyards Act this fall. "We're going to try to make sure that the playing field is as level as it can be," Vilsack said.

But on rainy morning that seemed almost too cool for the a state fair in August, Vilsack was challenged by a hog farmer from northwest Iowa on the Administration's support for cap and trade legislation.

"We need to not pass the cap and trade bill, because I spend about $2,400 a month on electricity right now," Mike Ver Steeg of Inwood, Iowa told Vilsack, explaining that he's worried the bill aimed at slowing global warming will drive up costs for his 850-sow farrow-to-wean operation.

Vilsack replied that some estimates of the cost of cap and trade legislation may not be accurate and the cost of doing nothing could be high. Fisheries in Alaska and forestry in Colorado "are currently seeing the impact of climate change," he said.

Because of the way the House cap and trade bill was written vital industries like fertilizers will not be affected in the first few years, he said. Other energy-related costs would be offset by the ability of farmers to sell carbon credits to industries whose greenhouse gas emissions are capped, he said

And the chance to trade credits will eventually more than offset costs, he said.

"Over the long haul, it is potentially tens of billions of dollars of net income opportunity for farmers," Vilsack said.

Ver Steeg isn't convinced.

"I'm trading carbon credits right now," he told Agriculture Online after the meeting. "It's peanuts, but I do it because I no-till farm and it works for me."

Ver Steeg is an independent hog producer who sells early-wean hogs to his father for finishing. The family grows all of its hog feed and uses manure on the farm for fertilizer.

He agrees that carbon credit payments would likely go up if a cap and trade bill passes Congress this year, but expects his costs to go up even more.

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