By Greg Vincent, Top Producer Editor
The Environmental Protection Agency (EPA) needs to stay out of farm policy, says House Ag Committee Chairman Collin Peterson (D-Minn.). Without that concession in the final draft of any climate change bill, he will not support it, Peterson said in an exclusive interview with Top Producer on Wednesday morning.
With current language in the The American Clean Energy and Security Act of 2009 (ACES), Peterson's opposition to the bill is echoed almost universally by agricultural groups. ACES, sponsored by House Energy and Commerce Committee Chairman Henry Waxman (D-Calif.) and fellow Democrat Ed Markey of Massachusetts, who chairs the Select Committee on Energy Independence and Global Warming, was introduced in late March. So far, work between the Agriculture Committee staff and the Energy and Commerce Committee staff has not produced the results Peterson wants in order to put his support behind the bill, which House Speaker Nancy Pelosi wants resolved by the Fourth of July.
You Pick: Legislation or Regulation
At issue is the Supreme Court ruling mandating reduction in greenhouse gas emissions under the Clean Air Act. Without legislation, this means the EPA will regulate emissions. The current language in ACES also grants this authority to EPA, and Peterson is unbending in his opposition to this provision.
"They're mixing climate change with energy independence and it's not going to work,” Peterson says. "They're putting ideology on what kind of crops we should grow and how we should grow them. We're setting a system where the EPA is in charge of telling you how to farm, and I'm not going to do that—that's the big picture.”
The best hope, according to National Farmers Union (NFU) President Roger Johnson, is cap-and-trade legislation, just not in the current form of the Waxman-Markey bill. Regardless of the outcome, Johnson says, costs will rise for production agriculture. The choice as he sees it involves accepting increased costs, but to a lesser extent with legislation and the chance to recoup some money with cap-and-trade. The other option is to accept the outrageous costs that would come with EPA-managed programs.
Increased Production Costs
Citing the economic impact studies he's reviewed, American Farm Bureau Federation President Bob Stallman says the impact on agriculture looks minimal at first, but he cautions that costs will rise rapidly in future years. EPA's own studies, Stallman says, show a $5 billion reduction in net farm income by 2020 and a $15 billion hit by 2050. He believes these numbers are too low.
"We believe we could actually show—with some pretty valid assumptions that maybe aren't quite as rosy as what EPA put in their analysis—that net farm income could be cut in half by 2050 from carbon cap and trade,” Stallman said Wednesday afternoon.
"I've been telling people the only option we have under the Waxman-Markey bill is to pay higher energy costs. That's our only role in it and that's unacceptable for agriculture.”
Economists at the Heritage Foundation paint a picture that is even more bleak with their analysis released Tuesday afternoon. A blog from Heritage lists these highlights from its analysis:
- Farm income (or the amount left over after paying all expenses) is expected to drop $8 billion in 2012, $25 billion in 2024 and over $50 billion in 2035. These are decreases of 28%, 60% and 94%, respectively.
- The average net income lost over the 2010–2035 timeline is $23 billion, a 57% decrease from the baseline.
- Construction costs of farm buildings will go up by 5.5% in 2025 and 10% by 2034 (from the baseline).
- By 2035, gasoline and diesel costs are expected to be 58% higher and electric rates 90% higher.
Peterson says he will meet with Waxman personally, but he isn't hopeful they will find a resolution. He believes he and Waxman will have to sit down with House Democratic leaders to negotiate a workable solution. As it stands now, Peterson feels the bill will do too much damage to agriculture because it is not treating the industry as part of the climate solution.
He is referring to the fact that any program to manage carbon offsets will be overseen by the EPA. He feels USDA is better equipped to manage any offsets.
"We're not going to agree to any offset system that is run by EPA, we're just not going to do it. We know more about sequestering carbon than EPA does. We have soil scientists, we have NRCS, we have somebody in every county. We've offered to them a process where we set up all the verification and at the end of the day we sign off on these credits at EPA and they are the ones that allocate them.”
Stallman will testify before the House Ag Committee this afternoon to voice his concerns over the bill. He wants the bill to include a statutory offset program that defines what practices and projects qualify for credits and that is run by USDA. He is also very concerned there is no provision to give credit to farmers who have already adopted environmentally friendly farming practices, a concern he shares with his counterpart at NFU.
NFU's Johnson, who also will testify at today's committee hearing, believes changes for farmers in light of climate change are inevitable. The question is whether those changes are from legislation or EPA regulation.
The follow-up meetings to the Kyoto Agreement are scheduled for this December in Copenhagen, and Johnson believes some action from the U.S. government will be taken by that time. NFU's position is cap-and-trade legislation.
"Our view is it's just a matter of time,” Johnson says. "This country is going to join the rest of the world on this issue. I think the administration has made that very clear. You've got the Copenhagen meeting coming up. I suspect there will be overwhelming pressure to be part of the Copenhagen agreement. We really see that as a given.
"If you see that as a given, then the question is, how are you going to do it? What methodology are we going to use in this country to deal with greenhouse gas emissions?”
As Johnson points out, cap-and-trade legislation is a key issue for Democratic leaders and the Obama administration, which is why many Washington insiders feel some version of this bill will pass, eventually. Speaker Pelosi's timeline is aggressive and with the threat of defections from members of her own party like Peterson, compromises will likely have to be made. What those compromises are remain to be seen, but Peterson seems unlikely to budge on most of his issues, and he believes he has support from others as well.
"They have a lot of other problems besides us. They have a problem with members in rural America, not because of REAs, but a lot of the Midwest is coal independent. There are a lot of issues besides just agriculture,” Peterson says. One midwestern member of the Ag Committee, Sam Graves (R-Mo.), has said, "I don't see any way I can support any version of this bill."
As for what it will take to get his support, Peterson is vague on specifics. But it's clear he will not look kindly on any involvement from EPA in farm policy.
"My end game is, if we're going to go down this road, we don't do damage to agriculture's role in energy independence,” he says. "Whatever scheme we come up with here is workable, in my judgment, in terms of agriculture. What combination of this will bring me to that conclusion? I'm not sure. I'm pretty sure that any role for EPA in agriculture is a deal breaker.”
You can e-mail Greg Vincent at email@example.com.