USDA, EPA work to refine economic model for bill

By WES SANDER

Capital Press

U.S. Agriculture Secretary Tom Vilsack this week renewed the argument that climate legislation can be crafted to benefit agriculture.

Legislation can be crafted to "avoid unintended consequences and provide enormous benefits to our agricultural economy, and our environment," Vilsack said in a statement after addressing the National Farmers Union on March 15 in Rapid City, S.D.

"USDA is committed to helping Congress design and implement a carbon offsets market that will provide significant income opportunities to America's farmers and ranchers," Vilsack said.

Joseph Glauber, USDA's chief economist, said his staff, along with the U.S. Environmental Protection Agency, is refining an economic model that was used to analyze a pending climate bill.

The bill, HR2454, passed the House last year but stalled in the Senate. Sens. John Kerry, D-Mass., Joseph Lieberman, I-Conn., and Lindsey Graham, R-S.C., are constructing a compromise bill.

The model predicted losses of 59 million acres of farm and grazing land as producers plant trees to capture profits from a future carbon-credits market.

Vilsack then deemed the model flawed, saying it doesn't reflect provisions in the House bill, which is backed by the Obama administration. The model was developed for the EPA by researchers at Texas A&M University, Oregon State University and Duke University.

Glauber said the review is focusing on vagaries regarding the capacity for carbon sequestration in converting farmland to forests, possible trends in the carbon-offsets market, demand for biomass energy and future conservation policy.

One problem, Glauber said, is that the model assumes that landowners can base decisions on whether to replace crops with trees on "perfect foresight" of future commodity and carbon prices.

"In reality, it is costly to convert cropland to forest and costly to convert back to cropland," and markets must promise a significant return before farmers will invest, Glauber said in a memo released this week.

Furthermore, the model does not account for existing carbon-sequestering practices on farms, a sticking point for agricultural sectors in which farmers have already adopted techniques that would qualify as carbon-sequestering, including reduced tillage techniques and dairy methane digesters.

Glauber said the agency is further investigating the potential of farming practices to generate carbon offsets.

Vilsack said in December that specialty agriculture would likely suffer impacts from new climate laws, but the legislation is important to U.S. agriculture on the whole.

"I think it is fair to recognize that different producers will be affected and impacted differently," Vilsack said in a conference call with reporters on Dec. 2. "Overall, we think more farmers will benefit than not."