December 8, 2009

 

US climate change bill provokes contrasting farm views

 

 

Some economists believe that climate change legislation would result to a sharp decline in meat production and higher grain prices, a view that clashed with the claims of Agriculture Secretary Tom Vilsack.

 

USDA economist Joseph Glauber estimates that hog slaughter by 2050 would be 23-percent lower compared with baseline levels, while fed beef slaughter would drop nearly 10 percent.

 

Milk production would drop about 17 percent compared with baseline levels. The reductions would be a result of crop lands being converted to woodlands, which the legislation promotes as a way to help reduce greenhouse gases.

 

Glauber said consumer prices could be offset partly if foreign producers increase their livestock production above baseline levels in response to higher prices.

 

Iowa State University economist Dermot Hayes said that as many as 50 million crop acres could be converted to woodlands under the legislation, on top of the current 30 million acres in the Conservation Reserve Programme and 40 million corn acres now being used by the ethanol industry.

 

With so many acres taken out of crop production, corn prices by 2030 would be about 28-percent higher than the baseline level and soy prices would be 20-percent higher, said Hayes.

 

The National Pork Producers Council is also against climate change bills as they would increase energy prices and production costs.

 

However, a new government study set to be released next week will show that most US farmers would profit substantially if a climate-change bill approved by the US House of Representatives were to be made law, US Department of Agriculture Secretary Tom Vilsack said Wednesday (Dec 2).

 

Those new revenues, generated from an "offset market" that would allow farmers to be paid for reducing carbon emissions, would more than make up for the increased energy costs associated with the bill's mandates for greenhouse gas emission caps on industry, said Vilsack.

 

And those net gains will only increase over time, he said.

 

Increases in food prices would be small, somewhat between 0.1 percent and 0.2 percent in the short run and somewhere between one percent and two percent by 2050, Vilsack added, citing government analysis.