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Agricultural community struggles to deal with climate change legislation

Climate change legislation remains a top goal of the Obama Administration, and the groups that lobby for farmers and ranchers in Washington are having a tough time dealing with it.

Even though California Congressman Henry Waxman is struggling to find enough fellow Democrats in his Energy and Commerce Committee to get a bill written by his goal of Memorial Day, other members of the House expect that chamber of Congress to pass some form of legislation this year.

When President Barack Obama visited a factory that makes wind generator towers Newton, Iowa on earth day, he made another pitch for a climate change bill.

"Now there's been some debate about this whole climate change issue, but it's serious," Obama said.

Iowa Congressman Leonard Boswell, who was at the event, told Agriculture Online that he expects the House to pass a climate change bill. "I wouldn't be surprised," he said. "It's going to be debated and discussed…and amended. That's what we do." But it's a priority in the House, he said.

Boswell isn't on Waxman's committee. He's on the House Agriculture Committee. And he's a member of the fiscally conservative Blue Dog Coalition of Democrats, a group that has been skeptical about the potential costs to the economy and rural areas from a bill that aims to lower the use of gasoline and coal over time.

Facing that sense of inevitability, 19 key producer groups held a closed-door "commodity roundtable" on Wednesday that devoted a half-day to discussing the issue and debating different approaches. Some groups favor opposing both climate change legislation and any effort that the Environmental Protection Agency might take to lower greenhouse gas emissions through regulations. Others favor working with Waxman to get the most favorable bill for agriculture, one that would allow for trading of carbon credits that would reward farmers for using no-till or installing methane digesters in livestock operations, for example.

So far, only six of the 19 groups at the meeting have signed off on a list of "principles for greenhouse gas legislation - The American Soybean Association, National Association of Wheat Growers, National Cattlemen's Beef Association, National Corn Growers Association, National Farmers Union and National Milk Producers Federation.

Those are the groups in the camp that favors active engagement on climate change, although it doesn't necessarily mean they'll endorse the final form of a bill coming out of Waxman's committee.

"The American Soybean Association has concerns about the impact on agriculture and the profitability of our members," said Rob Joslin, a farmer from Sidney, Ohio and ASA first vice president. "It won't affect soybeans as much as corn because soybeans are not as fuel dependent as corn is."

"I think ASA believes we should be strongly involved in the discussion and when a bill comes forth, we'll have to take a position on it," Joslin told Agriculture Online. ASA organized the commodity roundtable.

The American Farm Bureau Federation was also represented at the meeting by its president, Bob Stallman of Columbus, Texas.

Farm Bureau remains skeptical of any benefits from the Waxman bill.

In a recent interview, which will be published in Successful Farming magazine next week, Stallman said, "Agriculture is an emitter of greenhouse gases but we also have potential to sequester carbon. Any effort to reduce carbon is going to put a huge energy tax on the economy. Right now we can't see that agriculture will have a net benefit from any climate change legislation we have seen so far."

It isn't just President Obama pushing climate change legislation. The U.S. Supreme Court had a role when in 2007 it ruled that the Clean Air Act covers greenhouse gases. On April 17 of this year, the EPA, which enforces clean air laws, issued an "endangerment finding" that those greenhouse gases threaten public health. Farm groups worry that the EPA announcement is the first step toward regulating greenhouse gases.

That's why Mark Gaede, a lobbyist for the National Association of Wheat Growers, favors a strong push for the best possible climate change bill.

"The National Association of Wheat Growers feels that a legislative solution is the best way to go in light of the EPA's endangerment finding," Gaede told Agriculture Online this week.

Gaede thinks that if Congress doesn't pass a climate change bill and the EPA winds up regulating carbon emissions, farmers will be much worse off. They're not likely to be able to sell carbon credits. And they're more likely to be regulated as sources of carbon pollution.

"Frankly, my biggest fear is that it doesn't pass," Gaede says of the climate change legislation.

NAWG still has concerns about a discussion draft of a climate change bill that Waxman released earlier this year. The first draft has EPA running a carbon trading program. NAWG and other groups want USDA to run carbon trading with farmers, since USDA already has a century of agricultural research data on carbon sequestration in soils—one of the best ways to capture and store carbon with today's technology. It also thinks farmers should be able to trade an unlimited amount of carbon credits. Waxman's draft limits that to 1 billion tons a year in the United States.

Still, Gaade said, "A cap and trade bill is our best and maybe only hope to avoid very, very costly regulations on this."

Katy Ziegler Thomas, a lobbyist for National Farmers Union, agrees that the EPA's endangerment finding "starts the clock ticking" towards eventual regulations, especially if Congress fails to pass legislation. "I do think that if people encourage Congress to vote no on cap and trade, it's likely EPA is going to act," she told Agriculture Online. The first thing EPA will probably regulate is greenhouse gases from motor vehicles, she added. But there's no certainty about what the next step might be.

The cost to farmers of cap and trade remains a big issue.

"Nobody in the agriculture community disputes that fuel costs and fertilizer costs will increase," Ziegler Thomas said.

Farm Bureau cites a study of another climate bill that didn't pass Congress last year, the Lieberman-Warner Climate Security Act. The study, by Doane Advisory Services, was done for the Fertilizer Institute. It showed corn production costs rising by between about $40 and $80 an acre. In Doane's low-cost $40 scenario, about $25 of the increase came from higher fertilizer costs.

Sara Hessenflow Harper of the Clark Group, told Agriculture Online that other studies showed little effect on natural gas prices, so fertilizer prices would not rise as much and that carbon trading has potential to more than make up for farmers increased costs.

"This is very complicated stuff. It deals with our entire energy future. It's not easily modeled [with computer projections]," she said.

The big news of all these modeling runs is that offsets [trading carbon credits] are a huge cost containment measure," said Hessenflow Harper.

For example, if coal-fired power plants, a major source of carbon emissions, can buy offsets from farmers, it gives them time to develop their own technology to store carbon dioxide. In the early years of cap and trade, those coal plants can continue to use coal. But if they can't buy offsets, the power plants might be forced to buy natural gas for fuel, since it puts our lower amounts of greenhouse gases than other fossil fuels. That, in turn, would drive fertilizer prices higher.

Hessenflow Harper works for the Agricultural Carbon Market Working Group in Washington, which, along with the Wheat Growers, was one of the first agricultural groups to start lobbying for farmers on climate change legislation.

Wheat farmer Dick Wittman of Culdesac, Idaho, is one of the growers who formed the group, which wasn't at last week's meeting of larger commodity groups.

Wittman worries that if Congress doesn't pass cap and trade legislation, that the EPA may follow the lead of California's Air Resources Board, which in April voted to regulate fuels that emit carbon dioxide.

"I've been concerned from day one about what they're doing," Wittman told Agriculture Online. "They were never ones who wanted offsets." California has no provision for trading carbon credits that would reward farmers for storing carbon dioxide in soil.

"It's a classic regulatory approach - very punitive," Wittman said.

Climate change legislation remains a top goal of the Obama Administration, and the groups that lobby for farmers and ranchers in Washington are having a tough time dealing with it.

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