Sep 18, 2009

A new friend

The new chair of the Senate Ag Committee, Blanche Lincoln, D-AR, looks like she might be a pretty reasonable person for agriculture. It will be interesting to see if she follows along with the plans of the former Senate Ag chairman, Tom Harkin, D-IA, and his sometimes wild ag agenda. But I don’t think she will. I really don’t know that much about her, but from what I’ve seen so far, she’ll be alright.

Nonetheless, she took the time to speak with some of the members of the National Cattlemen’s Beef Association (NCBA) during their legislative rally in Washington last week. She appeared to be in support of most all the cattlemen’s concerns. She seems to have a broader perspective of agriculture than Harkin and I sure like her tone much better.

The Senate Energy and Natural Resources Committee held hearings on climate change legislation last week. There seemed to be some consensus that the Senate would not be able to get any cap-andtrade legislation done this year, which was music to my ears.

Our new friend in the Senate Ag Committee, who is also on the Senate Energy and Natural Resources Committee, didn’t seem too keen on pursuing the cap-and-trade issue.

“As a Member of the Senate Committee on Energy and Natural Resources, I am proud of the bipartisan energy bill that will promote greater energy efficiency, grow the use of cleaner, renewable energy sources, and encourage the use of domestic oil and gas resources that will create jobs and cut our dependence on foreign oil. Adding climate change legislation to the reforms already included in the Senate Energy Committee’s proposal is going to be a challenge in my view,” Lincoln said in her address to NCBA. “I am opposed to the House-passed cap-and-trade legislation which, in my view, picks winners and losers and places a disproportionate share of the economic burden on families and businesses in Arkansas. It is a deeply flawed bill, and I will not support similar legislation in the Senate. As chairman, I have some specific agriculture-related concerns. Under a capand-trade bill, crops like cotton and rice and our livestock industries could face higher energy costs without the added benefit of being able to sequester significant amounts of carbon. Whether it is cattle, poultry, or catfish, the potential for higher feeds prices under a cap-and-trade bill are a major concern. I plan to weigh in with Chairman Boxer in the next few weeks to share some ideas and ensure that the interests of producers are taken into account during any cap-and-trade process in the Senate.”

Some farm groups are tripping over themselves to get involved with the carbon credit markets and it’s easy to understand why. During last week’s hearings, Louisiana State University Economist Joe Mason said that many people are saying that carbon credit markets could be worth $1 trillion and that is “underestimating their true potential.” Other folks who testified suggested setting a market for carbon credits at $10 a ton with a possible ceiling of $28 a ton. It doesn’t sound like a market when tops and bottoms are already figured into the values of carbon credits. What portion of this carbon credit pie will agriculture be entitled to? It’s a lot of money they are talking about for a product that seems fairly abstract.

The part that I can’t get over is who is going to tell us how much carbon agriculture has actually sequestered. Seems to me that a concept this abstract would be a fine place for fraud and abuse and I just can’t see how agriculture will make it work with the increase in costs they will be subjected to. USDA has been trying to paint a pretty picture for agriculture in the cap-and-trade world, but keep in mind, nearly all this is speculation and simply picking numbers out of thin air.

As the new Ag Chairman Lincoln said, this House bill on cap-and-trade picks winners and losers, and that shouldn’t be the goal. She said that a climate and energy bill should clean up the environment, create jobs, and reduce U.S. dependence on foreign oil without pitting one region of the country against another.

She is also concerned that the idea of taking crop land out of production will hurt overall food production.

It’s kind of refreshing to hear someone in Senate leadership with some common sense. It has also been noted that she is not exactly inline with many in her party or the administration on the cap-andtrade issue. Now it will be interesting to see how she handles the pressure from her own party. For the most part, it looks like agriculture has some new friends in the House and the Senate Ag committees. — PETE CROW