FarmPolicy

December 9, 2019

Climate Change; Biofuels; Food Assistance; HSUS- Animal Agriculture; and H1NI

Climate Change- Background

As the climate change issue garners increasing attention in the debate over the future direction of U.S. farm policy, the Congressional Budget Office (CBO) has released an interesting background report entitled, “Potential Impacts of Climate Change in the United States.”

In part, the preface of the report stated that, “This Congressional Budget Office (CBO) paper—prepared at the request of the Chairman of the Senate Committee on Energy and Natural Resources—presents an overview of the current understanding of the impacts of climate change in the United States, emphasizing the wide range of uncertainty about the magnitude and timing of those impacts and the implications of that uncertainty for the formulation of effective policy responses. The analysis draws from numerous published sources to summarize the current state of climate science and provide a conceptual framework for addressing climate change as an economic concern. In keeping with CBO’s mandate to provide objective, impartial analysis, the paper makes no recommendations.”

The CBO report indicated that, “Human activities around the world—primarily fossil fuel use, forestry, and agriculture—are producing growing quantities of emissions of greenhouse gases, other gases, and particulates and are also greatly altering the Earth’s vegetative cover. A strong consensus has developed in the expert community that if allowed to continue unabated, the accumulation of those substances in the atmosphere and oceans, coupled with widespread changes in patterns of land use, will have extensive, highly uncertain, but potentially serious and costly impacts on regional climate and ocean conditions throughout the world.”

In addition, the CBO report explained that, “The uncertainties surrounding future emissions of greenhouse and other gases and land-use changes, the climate system’s response to those developments, and the resulting impacts greatly complicate the crafting of a policy response. They make the climate outcome of any particular policy very difficult to determine and, conversely, make the appropriate policy to achieve any desired climate outcome very hard to predict.”

Climate Change- Parallels from Australia

An AFP article from yesterday reported that, “Australia on Monday increased concessions for big polluters and delayed the start date of its emissions trading scheme because of the global financial crisis, in a stark shift on climate policy.

“Prime Minister Kevin Rudd said the deepening global recession meant local emissions trading could not begin until July 2011, one year later than previously planned.”

The AFP article added that, “It was a marked change in position by Rudd, who has for months insisted his government would proceed with emissions trading in 2010, despite the global market turmoil.”

In related analysis, Keith Johnson noted yesterday at the Environmental Capital Blog (The Wall Street Journal) that, “The parallels with [Australia and] the U.S. are striking. Both countries rely heavily on coal and have lots of industries that could get hammered by a climate bill. Both Mr. Rudd and President Obama have struggled to secure opposition support for their climate plans. And both are pledged to restoring economic growth and job creation.”

Despite the overall general similarities on climate change issues described by Mr. Johnson, varying legislative ideas and market differences could impact the agricultural sector of each country in different ways.

Recall that last week, Secretary of Agriculture Tom Vilsack described the climate change issue in the U.S. as, “a great opportunity for agriculture.” (As referred to in this audio clip (MP3-three minutes), that was part of this discussion that Sec. Vilsack had with Farm Broadcasters last week).

In Australia, Asa Wahlquist reported today at The Australian Online that, “Agriculture would be the industry hardest hit if it were to be included in the emissions trading scheme [ETS], according to a report by the Rural Industries Research and Development Corporation.

The report, prepared by the Centre for International Economics, estimates for the first time the cost of the ETS on individual farms. It found there would be cost increases for all sectors, with livestock the worst hit.

“Farm cash income for the average beef farm would fall by more than 60 per cent at a carbon price of $25 a tonne, or 125 per cent at a carbon price of $50/tonne.

“The income of the average sheep farm would fall by 45 per cent and 78 per cent respectively; the falls in dairy income would be 35 per cent and 69 per cent; and for wheat and other crops 15 per cent and 30 per cent.”

The article added that, “Even if agriculture were not included in the ETS, it would still face higher costs for inputs such as petrol, electricity, chemicals and other goods and services, the report says.”

The article also indicated that, “Agriculture produces 16 percent of Australia’s greenhouse gas emissions.” By contrast, in the U.S., agricultural contributions to greenhouse gas emissions generally are considered to be around 7 percent.

Yesterday’s Commodity News for Tomorrow report (CME Group, Dow Jones) reported that, “A government plan to cut carbon emissions isn’t appropriate for farming as the price of carbon proposed would slash farm income and profitability threatening the viability of the sector, acting president of the [Australian] National Farmers’ Federation, Charles Burke, said Monday.

“Australia accounts for 1.3% of global carbon emissions, and Australian agriculture just 16% of that 1.3%, so policy needs to be measured and in line with a global response, yet the latest research ‘starkly exposes how climate change policy can be far more damaging for our farmers than climate change itself,’ he said.

“Burke was commenting after Prime Minister Kevin Rudd unveiled changes to his government’s Carbon Reduction Pollution Scheme, which includes deferring its start by a year to July 2011, and adopting a one-year fixed-price period whereby carbon permits will cost A$10 a metric ton of carbon, with a transition to full market trading from mid-2012.”

Meanwhile, the Center for Agricultural and Rural Development (CARD) issued a report yesterday entitled, “Towards an Integrated Global Agricultural Greenhouse Gas Model: Greenhouse Gases from Agriculture Simulation Model (GreenAgSiM).”

A summary of the report stated that, “The Greenhouse Gases from Agriculture Simulation Model (GreenAgSiM) presented in this paper aims to quantify emissions from agricultural activity on a global scale. The model takes emissions into account that are directly attributable to agricultural production, such as enteric fermentation (methane), manure management (methane and nitrous oxide), and agricultural soil management (nitrous oxide). Furthermore, carbon stock differences from land-use change (carbon dioxide) induced by agriculture are included in the model. The model will provide policy makers with information about the greenhouse gas implications of policy changes.”

Climate Change- Budget Reconciliation Considerations Still a Concern

Yesterday, in his weekly column to constituents, Nebraska GOP Senator Mike Johanns indicated that, “The Senate last week passed the final budget report, which outlines the spending and taxing for the US government for 2010. I voted against this budget for a number of reasons, but primarily because it keeps us on a continued path of reckless spending and unsustainable borrowing that has plagued our country for far too long.

“Additionally, Senate budget conferees used what I believe are inappropriate legislative tactics to potentially pass sweeping legislation. Despite a bipartisan majority of opposition, the conferees left the door open to pass very complex, far-reaching legislation with little debate or the opportunity for amendments. This includes sweeping climate change legislation that could impose about a $3,000 annual tax on each family, an overhaul to the federal student loan program, and even the creation of complex and costly universal health care.”

***

In other news regarding the federal budget, an update posted yesterday at the Office of Management and Budget (OMB) Blog stated that, “This week is another busy one at OMB: we are releasing the full account-level budget on Thursday.

“Close readers of this blog may be wondering: didn’t you release the budget in February? Didn’t Congress already adopt its budget resolution?

“The answer is: welcome to life in a transition year. As we noted in February, that document was a budget overview, laying out the Administration’s priorities and the broad outlines of the budget, including the agency topline numbers. What it didn’t include was the program-by-program information on the discretionary side of the ledger – nor the details on several of the Administration’s mandatory and tax policies, such as the international tax and tax compliance initiatives that were rolled out today. (The budget resolution that was adopted by Congress last week similarly provides the framework for the year, not the detailed legislation necessary to implement that framework.)”

Yesterday’s update explained that, “This Thursday, we will release the Appendix, which contains full programmatic detail.

Biofuels

Reuters writer Timothy Gardner reported yesterday that, “President Barack Obama will direct the heads of three U.S. agencies to make the biofuels industry cleaner and encourage output of ethanol made from non-food crops, according to a draft memo obtained by Reuters on Monday.

“The Biofuels Interagency Working Group, to be headed by the secretaries of the Environmental Protection Agency, the Department of Energy and the Department of Agriculture, will be asked to identify policies that would make biofuels more environmentally sound and encourage production of ‘flex-fuel’ cars that can run on either gasoline or fuel that is mostly ethanol, according to the memo.

“In addition, Obama will ask Agriculture Secretary Tom Vilsack to ‘immediately begin refinancing of existing investments in renewable fuels as needed to preserve jobs in ethanol and biodiesel plants, renewable electricity generation plants and supporting industries,’ according to the memo.”

The Reuters article noted too that, “As carbon markets develop, producers of grain-based ethanol may come under pressure to prove that their fuels cut emissions of greenhouse gases.

“Environmentalists and some scientists say production of U.S. biofuels from corn and other grains can drive out production of other crops. That may force farmers in other countries to burn down forests and clear land — and create new sources of carbon dioxide, known as emissions from ‘indirect land use change’ — to grow those crops.

“The ethanol industry, on the other hand, says advances in new seeds and fertilizers mean they can grow more corn and other biofuel feedstocks on the same amount of land.”

And, the Reuters article reported that, “Separately the White House said it will hold a conference call on Tuesday with Vilsack, EPA Secretary Lisa Jackson, and DOE Secretary Steven Chu, in part to unveil a notice of proposed rule on the Renewable Fuels Standard on biofuels.

Industry groups, scientists, and environmentalists expect that the proposed RFS rule will examine whether and to what extent all biofuels cut emissions of greenhouse gases.”

Stephen Power, writing in today’s Wall Street Journal summarized the paradox of executive branch action regarding biofuels this way: “The Obama administration on Tuesday will step up efforts to increase the availability of ethanol at filling stations and to speed up subsidies to struggling biofuel producers. But the trade-off is that the administration is also expected to propose a rule that could make certain biofuels look less climate-friendly.”

Today’s Journal article explained that, “[T]he EPA is expected to propose measuring the greenhouse-gas emissions associated with biofuel production — including emissions that result overseas when farmers world-wide respond to higher food prices by converting forest and grassland to cropland. The EPA decision could undercut the environmental rationale the ethanol industry has used to sustain support for its government subsidies.

In an effort to ease the sting of Tuesday’s announcement, the administration scheduled a news conference to discuss not only the EPA rulemaking but also what it called Mr. Obama’s ‘commitment to advance biofuels research and commercialization.’”

DTN Ag Policy Editor Chris Clayton noted yesterday at the DTN Ag Policy Blog that, “The Obama administration will attempt to pull a bait-and-switch in the news cycle on Tuesday as the administration officially shifts the policy regarding the purpose and mission of biofuels.

“As the Environmental Protection Agency proposes new standards for measuring biofuels emissions, the White House will shift the story away from new obscure rules by rolling out administration officials to talk about more clean-energy investments and initiatives.”

Food Assistance

Wendy Koch reported yesterday at USA Today Online that, “The recession has caused more people to seek help at food banks, but it’s also prompted an outpouring of generosity.

“‘We’re up in terms of food and funds,’ says Ross Fraser, spokesman for Feeding America, the nation’s largest network of food banks. He says food donations are up 20% and cash donations are up 46% from a year earlier.”

The article added that, “Nationwide, Fraser says, requests for food aid have increased at least 30% in a year.”

And Reuters writer Charles Abbott reported yesterday that, “U.S. food stamp enrollment set a record for the third month in a row, rising to 32.55 million at latest count, the U.S. government said on Monday.

“In a monthly update, the Agriculture Department said food stamp enrollment in February of 32.55 million was up 1.1 percent, or 350,000 people, from January and up 17 percent, or 4.8 million people, from one year earlier.”

HSUS- Animal Agriculture

An update posted last week at AgWired.com indicated that, “The President of the Humane Society of the United States, HSUS, Wayne Pacelle, spoke to the National Association of Farm Broadcasting [on April 27].” The AgWired post contained a complete audio replay of Mr. Pacelle’s remarks and discussion with the audience.

In this clip from his presentation (MP3-about two minutes), Mr. Pacelle provided a very general overview of some of HSUS policy objectives with respect to animal agriculture production.

And in this clip (MP3-about two minutes), Mr. Pacelle spoke about his desire to have HSUS discuss policy issues regarding animal agriculture production with industry participants rather than working on legislative measures to forward the organization’s goals.

Meanwhile, Ben Sutherly reported on Sunday at the Springfield News Sun Online (Ohio) that, “Third-generation egg producer Tim Weaver has a 1950s-era egg carton labeled ‘Purina Cage Eggs.’

“‘They are always clean — the hens never touch the ground,’ it proclaims.

Half a century later, the caged-hen production method, which Weaver said provides the highest degree of food safety and hen care, faces an unprecedented challenge in Ohio from the Humane Society of the United States.

HSUS wants to phase out not only battery cages for Ohio’s 27.3 million egg-laying hens, but also gestation crates for its pregnant pigs, and crates for veal calves in favor of group housing.”

The article added that, “If farm groups won’t work with HSUS to craft legislation, it likely will put a ballot initiative before Ohio voters next year.

“California voters handily approved a similar ballot measure in 2008 that mandates freer movement for egg-laying hens, pregnant pigs and veal calves by 2015.

“Ohio’s egg production, valued at $483 million in 2007, ranks second only to Iowa’s. Darke and Mercer counties, both within an hour’s drive of Dayton, ranked second and third in egg production among all U.S. counties in 2007.

But that could change if battery cages are phased out.”

In a separate article from Sunday, which was posted at the Dayton Daily News Online (Ohio) Ben Sutherly reported that, “In February, Humane Society of the United States officials met with several Ohio farm groups to discuss their goals to change how the state’s hens and hogs are housed.”

This article explained that, “To achieve those goals, it [HSUS] wants to either work with farm groups to craft legislation that would phase out intensive confinement of livestock and poultry, or let voters decide, perhaps in 2010.

“Ohio’s animal agriculture groups said they’re still deciding how to respond. But they haven’t warmed to HSUS, billed as the world’s largest animal welfare group with a $130 million annual budget.”

H1NI

Bloomberg writer Whitney McFerron reported yesterday that, “Hog futures dropped to a seven-week low on speculation that pork demand will shrink after swine flu was found among pigs in Canada. Cattle also declined.”

The article stated that, “Hog futures for June settlement fell 1.8 cents, or 2.7 percent, to 63.775 cents a pound on the Chicago Mercantile Exchange. The price earlier slipped to 63.7 cents, the lowest for a most-active contract since March 11. Futures tumbled 8.5 percent last week, after the initial reports of humans contracting swine flu.”

“Wholesale pork prices have declined 6.9 percent since the initial outbreak was reported, dropping to 55.68 cents a pound on May 1, according to USDA data. Eleven countries have blocked imports of some U.S. pork,” yesterday’s Bloomberg article said.

Keith Good

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