, Top Producer Crops & Issues Editor
A sweeping climate change bill that passed in the House of Representatives last Friday remains the source of contention among some agricultural groups.
The American Clean Energy and Security Act of 2009 will require major U.S. sources to reduce carbon emissions by 17% by 2020 and 80% by 2050 compared to 2005 levels and allows farmers to fully participate in a carbon offset program, which permits payment for farm activities that help reduce greenhouse gas (GHG) emissions.
The legislation contains other bonuses for agriculture, including: moving oversight of carbon-reduction efforts by farmers from the Environmental Protection Agency (EPA) to the Department of Agriculture; providing a list of eligible agricultural offsets; and prohibiting the use of indirect land use calculations in evaluating the use of biofuels.
Yet many farm groups still fear this bill is economically damaging to agricultural producers. The AFBF opposes the legislation, as does the National Cattlemen's Beef Association and Agricultural Retailers Association, due to concerns about the impact of climate legislation on fertilizer costs, which are determined by natural gas.
An AFBF economic analysis shows that at a minimum, net farm income will decline by $5 billion annually by the year 2020 if the legislation passes Congress.
Even with the compromise language pushed through by House Agriculture Committee Chairman Collin Peterson, the National Pork Producers Council opposes the bill because it anticipates significant increases in energy prices and pork production costs under the climate change measures. "The hikes would be overwhelming to pork producers, who for the past 21 months have been losing an average of $22 per hog,” states the NPPC.
Some agricultural groups also are concerned about the trade sanctions in the legislation that call for imposing tariffs on imports in 2020 for any country that doesn't take the same climate-change steps as the U.S.
Best deal for agriculture. It's understandable why some farm groups may fear climate change measures, but this cap-and-trade legislation is actually the best route for agriculture, says Laura Sands, a partner at The Clark Group, an environmental consulting firm.
"This is the best deal that agriculture could have gotten out of the House,” says Sands. "In the end, if Congress doesn't enact some type of greenhouse gas emissions policy, we've received a clear message that EPA will. Agriculture will fair much better through a cap-and-trade policy than regulation by EPA.”
Renewable energy groups also are pleased with this climate legislation because it prohibits the EPA from including indirect land use theory (ILUC) in its rulemaking until more scientific research is conducted.
ILUC is the concept that using biofuels made from U.S. corn and soybeans causes a farmer halfway around the world to make a land use decision to plow virgin land to replace feed. It also suggests that any carbon emissions resulting from this land use change should be ascribed to biofuels.
The American Clean Energy and Security Act of 2009 prohibits the EPA from imposing a penalty on biofuels for at least five years.
The House action on ILUC shows politicians at least are listening, says Tom Buis, CEO of Growth Energy, an organization made up of ethanol producers. However, if Congress does not act before January to fully eliminate the ILUC provision from the EPA, "it will threaten the overall production of ethanol, biodiesel and how we farm today,” he says.