FarmPolicy

February 19, 2020

Climate Change; Bifouels (Indirect Land Use); Clean Water Act; and Ag Sector Issues

Climate Change- Compromise Nearing?

Jared Allen reported yesterday at The Hill Online that, “A flurry of meetings in Speaker Nancy Pelosi’s (D-Calif.) office has led to a near-deal on the climate change bill, perhaps paving the way for the bill to be brought to the floor by the July 4 recess.

“Energy and Commerce Committee Chairman Henry Waxman (D-Calif.) is close to an agreement with Agriculture Committee Chairman Collin Peterson (D-Minn.), who at the beginning of the week was warning of a rural Democrat ‘revolt’ over the legislation if not changed.”

Mr. Allen indicated that, “Neither Waxman nor Peterson would comment on the status of specific sticking points — including the regional distribution of electricity allowances. But both men said significant progress had been made throughout the day.

“Waxman, Peterson, and Energy and Environment Subcommittee Chairman Edward Markey (D-Mass.) were walking together and laughing on their way back and forth from the House floor to the Speaker’s auxiliary office.

“‘We’ve resolved some of these issues,’ Peterson said. ‘We’re close to having a legislative solution.’”

Yesterday’s Hill article added that, “That meeting was preceded by another that the Speaker hosted — between Waxman, Markey and 11 moderate Republicans that Democrats are looking to for support of the climate bill.

“Aides to Pelosi described a productive meeting that proved that even across the aisle, many of the issues needing to be ironed out are regional as opposed to partisan.”

With respect to the Speaker’s engagement with the “11 moderate Republicans,” Reuters writer Richard Cowan reported yesterday that, “Bipartisan backing for the legislation in the House could improve its prospects in the Senate later this year or next and boost U.S. standing at an international climate change conference Obama plans to attend in December in Copenhagen.

“To reach that goal, Pelosi and other leading Democrats are negotiating with different groups of lawmakers who worry the bill could hurt their constituents.

Chief among them are farm-state lawmakers, who want protections for corn-based alternative fuels and additional help for rural electric utilities. The largest U.S. farm group, the American Farm Bureau Federation, has announced its opposition to the House Democrats’ bill.”

Mr. Cowan added that, “Another Republican who attended Thursday’s meeting with Pelosi was Representative Timothy Johnson, who said he and his Illinois constituents had ‘very, very major concerns’ about the climate change bill. He told reporters he was listening to ‘both sides’ of the debate.”

Other published reports quoted Rep. Johnsons as saying, “I don’t want anybody to leave this with the perception that I have committed to vote for it because I certainly haven’t.”

Meanwhile, Ian Talley reported today at The Wall Street Journal Online that, “House Democrats are on the verge of a deal with rebelling Farm Belt legislators on a climate-change bill, a move that could pave the way for a full House vote on legislation as soon as next week.

“Dozens of Democrats — mostly from Midwest agricultural states — are concerned that the bill, which aims to cut greenhouse-gas emissions, could disproportionately raise energy prices for residents and businesses in their states.

“Lawmakers and industry officials close to the negotiations said the two sides could reach an agreement within days, under which rural utilities could receive a small share of free emission credits — less than 1% of the total that would be handed out. The credits allow the holder to emit a certain amount of greenhouse gases.”

Mr. Talley quoted a spokesman for the Speaker as saying; “We’re very optimistic about progress…We should know in the next couple of days if we’ll be able to introduce the bill next week.”

Today’s Journal article pointed out that, “If a deal is reached, prospects for passage in the House are stronger than in the Senate, where many lawmakers still have reservations about the climate-change proposal. Senate Majority Leader Harry Reid (D., Nev.) said he planned to take up a version of the House bill later this year.”

Stephen Dinan and Edward Felker flushed out additional details on how the Democratic legislative leadership might strategize to garner support for the climate bill in an article published in today’s Washington Times.

The Washington Times writes reported that, “House Democrats neared a deal Thursday on a bill to combat global warming, but a top party strategist warned that to sell any plan to voters they’ll need to change the way they pitch it — including curbing the use of the term ‘green’ jobs and even talk of ‘global warming.’

In a strategy memo, Democratic think tank Third Way and top party strategist Stanley Greenberg warned Democrats that swing voters don’t care about fighting global warming, and said terms like ‘cap-and-trade’ are useless. Instead, the memo suggests that Democrats tap into Americans’ optimism that clean energy can help improve the faltering economy.

“‘For most voters, global warming is not significant enough on its own to drive support for major energy reform,’ the memo says. ‘So while it can be part of the story that reform advocates are telling, global warming should be used only in addition to the broader economic frame, not in place of it.’”

In addition, today’s Washington Times article explained that, “A deal could clear the path for the Democrats’ bill to reach the House floor. Mr. Peterson and other Democrats on the Agriculture Committee have objected to the bill’s treatment of farmers and rural cooperative electricity utilities.

“‘We have an idea for a conceptual understanding that we are now looking at in more detail, and I think that we’re almost there,’ Mr. Waxman told reporters, though he wouldn’t provide any details.

Mr. Peterson pitched the plan to about 10 fellow Democrats on the Agriculture Committee on Thursday afternoon, but declined to speak to reporters afterward.”

While the details of a negotiated agreement on climate change have yet to emerge publicly, Tom Webb reported yesterday at the Pioneer Press Online (Minn.) that, “Minnesota farmers thought they’d be wearing the white hats.

“When the climate-change debate began, many growers were intrigued. They control millions of green acres, the dawn of carbon credits promised new revenue and biofuels showed green could be profitable.

“‘We are the ones that are growing the crops, and we are the ones that have control over the carbon capture,’ said Doug Albin, a corn and soybean farmer near Clarkfield. ‘So we were trying to figure out if there’s anything we could do to help.’”

Mr. Webb noted that, “It hasn’t worked out that way. As global-warming legislation is being rushed through Congress, nearly every farm group in America now opposes it. Even the Farmers Union, which remains gung-ho about carbon-credit trading, said it would ‘very much like to support climate-change legislation.’ But it won’t, as written.”

And, a news release issued yesterday by the National Pork Producers Council (NPPC) stated that, “In a letter sent today to House Agriculture Committee Chairman Collin Peterson, D-Minn., and Ranking Member Frank Lucas, R-Okla., the National Pork Producers Council indicated its opposition to climate change legislation, which it said will raise the cost of pork production.”

The release stated that, “NPPC anticipates an increase in energy and input costs of more than 20 percent under the proposed climate change legislation, and it doesn’t believe that revenues from the sale of greenhouse gas offset credits will balance that increase. In addition, the organization is wary of the impact the legislation would have on pork producers’ ability to compete fairly in world export markets.

“If Congress insists on passing a climate change bill, said NPPC, a number of areas in the bill must be improved before the organization could support it, including that the bill designate the U.S. Department of Agriculture, rather than the Environmental Protection Agency, as the lead agency on the design and implementation of the agricultural greenhouse gas offset credits program and on the development of any regulations affecting livestock producers.

The bill also needs to more clearly address and account for the tremendous advances that livestock producers already have made in reducing their carbon footprint. NPPC pointed out that since 1990 production agriculture’s greenhouse gas emissions have increased only 3.5 percent while U.S. meat production has increased 40 percent; since 1948, manure generated by U.S. meat-producing animals has been reduced 25 percent while production of meat has increased 700 percent.”

Biofuels (Indirect Land Use)

An article posted yesterday at Farm Futures Online pointed to a recent article on biofuels by Iowa State University Agricultural Economist Robert Wisner.

In part, Dr. Wisner noted (“Biofuels and Greenhouse Gas Emissions on a Collision Course”) that, “The Energy Independence and Security Act (EISA) of 2007 requires a gradual increase in the volume of various kinds of biofuels to be blended with U.S. motor fuels in the next several years. The gradual increase was designed to provide time for technology development and industry growth. At the same time, the EISA – unless modified – requires a one-step adjustment in greenhouse gas (GHG) reductions, rather than a gradual phase-in to reflect less than instantaneous technological progress. The EISA also implicitly assumes that greenhouse gas (GHG) emissions from the baseline that is used to evaluate biofuels will be unchanged in the future. It is debatable whether that assumption is valid.

“These two different sets of mandates are now on a collision course. If changes are not made, their different paths could slow or halt the growth of some parts of the biofuels industry. The sectors of the industry to be most immediately affected are Midwest corn-starch ethanol and biodiesel from vegetable oils. As regulatory activity on the GHG issues has progressed, two different government agencies have become involved. One is the U.S. Environmental Protection Agency (EPA), which has recently announced proposed national assessments on GHG emissions. The other is the Air Resources Board of the California Environmental Protection Agency. California has decided to move ahead more quickly than at the national level in establishing regulations to reduce GHG emissions and has developed assessments of GHG emissions for several different kinds of biofuels.”

After more detailed analysis, Dr. Wisner concluded his article by noting that, “Indirect land use impact is an important component of the California estimated emissions disadvantage from corn-starch ethanol. Scientists and economists are not in universal agreement on ways of measuring this impact. Much more research is needed before universally acceptable indirect land use impact assessments are available. With the rapid rate at which GHG emissions policy is moving forward, there is an urgent need for more research on indirect land use impacts.”

Clean Water Act

Dow Jones News writer Darrell A. Hughes reported yesterday that, “Environmentalists praised Senate lawmakers on Thursday for approving legislation that more clearly defines which bodies of water are subject to federal regulation.

“The Senate Environment and Public Works Committee voted, 12 to 7, to approve legislation sponsored by Sen. Russ Feingold, D-Wisc., that would amend the federal law – Clean Water Act of 1972 – by replacing the term ‘navigable waters’ with ‘waters of the United States,’ among other changes.

“The legislation, dubbed the Clean Water Restoration Act, now faces approval by the full Senate.”

However, Mr. Hughes noted that, “‘The very premise of this bill is to override a state’s fundamental right to oversee waters within its borders and to usurp the power of land owners to manage their property as they see fit,’ Sen. James Inhofe said during the committee vote early Thursday [related information available here]. The Oklahoma Republican is the committee’s ranking member.

“He added, ‘Allowing [the Environmental Protection Agency and the Army Corps of Engineers] to exercise unlimited regulatory authority over all interstate and intrastate water – or virtually anything that is wet – goes too far.’

Inhofe vowed to vigorously fight to make sure the amended legislation does not become law.”

Recall that an American Farm Bureau Federation news release from earlier this month stated that, “The American Farm Bureau Federation today said S. 787, the Clean Water Restoration Act, leaves no water unregulated in the United States and could even impact standing water from rain in a dry area. The organization signed onto a letter on behalf of the Water Advocacy Coalition to Senate Environment and Public Works Chair Barbara Boxer (D-Calif.) and ranking member James Inhofe (R-Okla.) asking them to oppose the legislation.

“‘S. 787 would remove any bounds from the scope of Clean Water Act jurisdiction, so that the regulatory reach of the act would extend to all water — anywhere from farm ponds, to storm water retention basins, to roadside ditches, to desert washes, to streets and gutters, even to a puddle of rainwater,’ stated the letter. ‘For the first time in the 36-year history of the act, activities that have no impact on actual rivers and lakes would be subject to full federal regulation.’”

Ag Sector Issues: Dairy

New Hampshire state representative Bob Haefner penned an article that was posted yesterday at the Union Leader Online, where he noted in part that; “All of our New Hampshire dairy farmers are in trouble. Every time they milk a cow, they are losing money. It is not just a New Hampshire problem; it is a nationwide demise of the dairy industry.

“The current price that a farmer in the Northeast receives for milk is between $10 and $12 per hundred pounds of milk (11.6 gallons). The break-even point averages about $16.94 and recently has been as high as $18 to just cover costs. It does not take a mathematician to see that our dairy farmers are losing money.”

Ag Sector Issues: Swine

The AP reported today that, “Marty Malecek got a business degree intending to take over the Minnesota hog farm that his father started nearly 20 years ago. Instead, they are selling their 1,700 hogs and auctioning off land after it became clear that they could no longer cover their costs.

“It was a combination of blows: rising feed costs as the production of ethanol increased competition for corn and soybeans. High energy costs. A drop in demand as the recession meant people were eating less meat. The resulting oversupply that kept prices low. And then, swine flu.”

The article noted that, “The pain has been felt across the industry. While larger, more-diversified operations will likely survive, industry officials, producers and analysts say many small- and medium-sized farmers could be forced out of business. Most are family-run operations, meaning relatives could all be out of work. And it could mean roller-coaster prices at the store until supply and demand come back in line.”

Ag Sector Issues: Egg Production

Wes Sander reported yesterday at The Capital Press Online that, “The [California] Senate Committee on Food and Agriculture on Tuesday passed a bill that would extend the cage-size restrictions of Proposition 2 to out-of-state egg producers.

“AB1437, by Assemblyman Jared Huffman, D-San Rafael, would apply the rules created by Proposition 2 to outside producers whose eggs are sold in California. The bill was passed to the Senate by an overwhelming Assembly floor vote.

“Prop 2, enacted by voters in November, imposes cage-size restrictions on the state’s egg-production facilities. Producers complain that the initiative contains no enforceable standard, only the vague requirement that animals’ movements not be restricted.”

The article stated that, “‘One of the things we have made clear since the very beginning, we need an enforceable legal standard,’ said Dennis Albiani, a lobbyist representing the Association of California Egg Farmers. ‘This is a criminal statute that puts the farmer and their employees at significant risk of fines and jail time. We feel that (AB1437) is an appropriate vehicle to do that.’

“The Association of California Egg Farmers, which has registered in opposition, says it is working with Huffman to create the standard.

“Producers say they need the detailed rule as soon as possible in order to begin borrowing money for facility renovations, which must be completed by 2015, when Prop. 2 takes effect.”

Lawmakers have raised the question of whether the bill would violate the U.S. Constitution, although discussion of the topic has been limited. The Constitution’s Commerce Clause forbids states from passing laws that obstruct interstate trade,” the article said.

Keith Good

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