Study: Climate bill will raise farm costs

Tom Vilsack, secretary of agriculture

Vilsack says bill will include safeguards for farmlands

The Capital Press

A study commissioned by the National Corn Growers Association says costs to commodity growers from current climate legislation would be minimal in the short run, but high in the long run.

The study analyzes the impacts of HR2454, the bill that passed the House of Representatives in June, to the nation's corn, wheat and soybean producers.

The bill would increase the cost of fuel and farm inputs.

The magnitude of costs to producers hinges on fertilizer prices. Until 2025, the bill would not cap emissions from fertilizer production. But through the following 10 years, that exemption would phase out, expanding costs of fertilizer production and raising its price.

The study says the increase could total $50 per acre above 2009 costs. It also warns that the cost could be higher if the fertilizer allowances prove insufficient to keep up with rising natural gas prices.

Until 2025, production-cost increases would appear mostly in the "prairie gateway" region (including Kansas and parts of Oklahoma, Texas, New Mexico, Colorado and Nebraska) because the region uses more energy for irrigation, the study says. But after 2025, the increases will show up more heavily outside the region, where producers use more fertilizer.

The study also shows that afforestation of pasture and cropland offer several times the potential for generating offset revenue for farmers. Members of Congress have expressed concern that farmland could shrink if landowners grow forests instead of crops to capture greater carbon-offset profits.

Under a cap-and-trade system, the government would sell emission allowances, which would allow emitters to emit given amounts of greenhouse gasses. But emitters could also purchase carbon offsets, which could be generated by farmers and ranchers through approved land-management practices.

Agriculture Secretary Tom Vilsack has said that a cap-and-trade bill would contain measures to safeguard farmland.

The study, conducted by Informa Economics of Memphis, Tenn., prompted the association to oppose the bill. Previously, NCGA was neutral.

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