FarmPolicy

August 21, 2019

Climate Issues and Agriculture; Trade; Biofuels; Crop Insurance; and Ag Communications

Climate Issues and Agriculture

In an opinion item published in Sunday’s Des Moines Register, Neil D. Hamilton, a Professor of Law and Director of the Agricultural Law Center at Drake University, noted in part that, “Next month, I travel to Copenhagen for the U.N. Climate Change Negotiations (COP 15) with two Drake agricultural law students. We are part of the Iowa U.N. Association delegation going to witness the international talks on possibly the most significant environmental, social and political issue shaping our futures.

My special interest is what the talks may mean for farmers in the United States and abroad. U.S. policy discussions show much of America’s agricultural sector doesn’t take climate change seriously.”

Mr. Hamilton indicated that, “The Kyoto climate-change treaty created little role for agriculture, but proposals for COP 15 give farmers a large, even central role. Still many U.S. farm groups are ambivalent – not just to Copenhagen but to whether climate change is real or U.S. action is needed.

“Some groups like the National Farmers Union and the renewable energy coalition 25X25 endorse cap-and-trade legislation as the basis for ambitious goals for Copenhagen.

“Others like the American Farm Bureau Federation oppose cap and trade – and appear uninterested in what the world may do. Farm Bureau members are being encouraged to protest to Congress ‘don’t cap our future,’ arguing agriculture will suffer increased energy costs with no corresponding economic benefits. Studies show the proposed legislation will have limited impacts on farm costs and Secretary of Agriculture Tom Vilsack argues the law will open new streams of farm income from offsets and carbon markets.”

The opinion piece went on to add that, “The opposition to climate-change action is puzzling given agriculture’s support for biofuels like corn ethanol as the ‘answer’ to our energy needs. America’s farmers have a successful history of innovating to meet new demands. But U.S. politics on cap and trade has become largely a question of ‘What is in it for me?’ rather than focusing on how agricultural practices can help address climate change.

“Our responding is not optional – the scientific and international political realities of climate change are real, as is the need to act. Yes, there is debate about whether the practices and policies being proposed will significantly reduce global temperatures, but disagreement about effectiveness shouldn’t obscure the fact that doing nothing ensures no progress.

“From a legal perspective, something will happen. If Congress fails to act, the Environmental Protection Agency will regulate greenhouse gas emissions as required by a 2007 U.S. Supreme Court ruling. Legislation may raise concerns but it will be friendlier and more tailored to agriculture’s needs than EPA regulations.”

Meanwhile, Christa Marshall of ClimateWire reported yesterday at The New York Times Online that, “A group of U.S. senators who could determine the fate of a climate bill received more than $20 million in campaign contributions over the past two decades from energy interests with a direct stake in pending legislation.

“Electric utilities poured at least $4.2 million to the 27 lawmakers, who are considered ‘fence sitters’ on a global warming bill, according to an E&E analysis (pdf) of potential votes. The oil and gas sector pumped $5.8 million to the group over the past 20 years.

“Transportation companies and their associated unions gave some $6 million combined, while forestry companies and agricultural interests doled out more than $2 million. Environmental groups donated $315,000 over the same time frame.”

Yesterday’s article pointed out that, “[P]roducers of crops like rice and sugar gave more than $1 million to six of the fence sitters from big farm states, but largely ignored the rest of the 27. Senate Agriculture Committee Chairwoman Blanche Lincoln (D-Ark.) received more than $600,000 in campaign donations from the sector since her assumption of office in 1999.

“‘Senator Lincoln is accountable to her constituents alone and considers legislation with only Arkansans’ best interest in mind,’ said spokeswoman Katie Laning Niebaum in response.”

The article also noted that, “American Crystal Sugar, a beet sugar producer with extensive operations in North Dakota, is a top giver to [Sen. Kent] Conrad [ND] and his Democratic colleague [Sen. Byron] Dorgan. The company’s representative association, the U.S. Beet Sugar Association, met with the offices of both politicians, according to its newsletter (pdf).

James Johnson, president of the association, declined to elaborate on the exact provisions pushed for by the group, but said ‘a cap-and-trade system has the potential to impose a huge cost’ on the industry.”

Agriculture and climate change will also be the subject of two days of hearings this week that will be held by the House Agriculture Subcommittee on Conservation, Credit, Energy, and Research.

On Wednesday, the Subcommittee will review the potential economic impacts of climate change on the farm sector, and on Thursday lawmakers will review the costs and benefits of agriculture offsets.

Regardless of the position on specific legislation, many segments of the U.S. agricultural sector have been and continue to be engaged in the climate debate and will likely be a significant variable in determining the final outcome of domestic climate policy.

However, Dan Morgan, a former reporter and editor with the Washington Post, who recently completed a fellowship with the German Marshall Fund of the United States, noted in a recent article that was posted at European Affairs Online (“In U.S. Climate Debate, Farms are Crucial Lobby”) that the agricultural sector in the EU is playing a much smaller role as the climate debate moves forward.

Mr. Morgan explained that, “Agriculture is a political heavyweight in Europe, but in the U.S. farms (and rural regions sprawling across a continent) are an even bigger sector. The U.S. Congress contains a strategically-organized bloc of: ‘Agricrats’ (pro-farm Democrats) who fear losses from carbon caps, and so the need to reward farmers with ‘agricultural offsets’ is a political imperative in Washington for climate action. In Europe, the climate debate has focused on industry and the farm dimension has been ignored.

“On the side of the Atlantic where rural restaurants serve ‘chicken-fried steak’ instead of terrine or schnitzel, Europe’s farm bloc has acquired an almost legendary reputation for lobbying clout as exemplified, say, by the weight of the Common Agricultural Policy in trans-atlantic trade negotiations. American farmers often wish they wielded the same kind of power and influence.

So I was surprised recently by the answer I got from a senior official from Brussels when I asked him about the role agriculture was playing in the European debate over climate change. After a pause and a momentary blank stare, the European Commission official replied that the farm lobby hadn’t been a major factor.”

The article noted that, “It couldn’t be more different in the United States. With the debate in Congress at a critical point about climate-change legislation, agriculture is a key actor. Those who thought the farm bloc’s influence ended sometime around the end of the Eisenhower administration have had to adjust their thinking — and that seems to include a number of lawmakers on the energy committees who have had to confront the power of law-makers representing agricultural interests.

“Comprehensive climate legislation passed the House of Representatives in July in the Waxman-Markey bill, but only after substantial concessions to agricultural producers, including the burgeoning bio-fuels industry centered on corn-based ethanol. In the Senate, agriculture is far more powerful because every state has farming interests, and sparsely populated rural states wield outsized influence. In this chamber of Congress, the legislation is in deep trouble. The largest U.S. farm organization, the American Farm Bureau Federation, has vowed to kill it. The powerful chair of the Senate Agriculture Committee – Blanche Lincoln, a centrist Democrat from Arkansas, has called the chances of passage a ‘heavy lift’ despite the fact that she belongs to the same party as President Obama. Whereas the White House is pressing for legislation, she represents rice, cotton and poultry interests that fear being penalized by charges on carbon for rural food producers in sprawling agricultural areas. She and other strategically-positioned lawmakers with farm constituencies will want big sweeteners before any bill is allowed to start toward the President’s desk.

“In one Senate committee, Environment and Public Works, a draft climate bill narrowly passed on November 5. But the vote was boycotted by all committee Republicans and an ominous ‘no’ vote was cast by a key Democrat, Max Baucus (a Democratic from Montana, another rural state), who also chairs the powerful Finance Committee. He cited concerns over the agricultural provisions in the bill. Now Baucus’s own committee, which is laced with farm-state Senators, will take up the legislation to write its own version of a climate-change bill.”

After additional analysis, Mr. Morgan stated that, “Despite the skepticism of climate legislation across rural America, the opposition is not universal. The National Farmers Union, a Democratic-leaning lobby that is the country’s second-largest farm organization, supports cap and trade. This differing position is personified in Congress by representatives such as Betsy Markey, a freshman House member from a rural, agricultural district that covers most of eastern Colorado. Her political situation exemplifies the tensions in an emerging climate-debate on agriculture known as ‘Old Ag versus New Ag.’ Her constituency in the West is dominated economically by wheat, corn and cattle, as it has for generations; but the economic future of her district may rest more with ‘new economy’ alternative-energy development: Colorado is a center of pioneering activity on renewable fuels, and her district is home to wind farms, companies making solar panels and turbine blades, and biofuel – research facilities. All of these activities would benefit from tax credits and other incentives in the climate bill.

“In her part of the country, with or without legislation, carbon is emerging as a commodity in the business calculations of farmers, alongside wheat, corn, soybeans and sunflowers. Even farmers who oppose the legislation are eyeing the prospect of profits with interest. ‘If it paid enough I’d have to look at it,’ a Colorado wheat and corn grower confided to me when I traveled there recently. Markey voted for the House bill, one of seven freshmen on the Agriculture Committee to do so.

“In the Senate, momentum appears to be growing for a robust ‘agricultural offsets’ program that could lure rural support for the climate bill. Influential Senators (such as Majority Leader Harry Reid from Nevada) are supporting a sweeping proposal in the Agriculture Committee that, among other things, would enable farmers to earn credits for a variety of practices that store carbon.

“That won’t insure enactment by any means. (Senator Lincoln, significantly, has not signed on.) But it suggests that, like it or not, U.S. agriculture is going to have a seat at the table.”

From an international perspective on climate issues, Bloomberg writer Gaurav Singh reported yesterday that, “India, the fourth-biggest producer of greenhouse gases, won’t accept any proposal by Denmark to set a ‘peaking year’ after which global emissions will fall, Environment Minister Jairam Ramesh said.

“‘How can we accept that by 2025, our emissions should peak?’ Ramesh said today in an interview at an event organized by the ministry in New Delhi. ‘If the Denmark draft is any indication then we are headed toward a dead end’ in seeking a climate agreement next month during global talks in Copenhagen.

“A draft proposal prepared by Denmark, which is hosting the Dec 7-18 climate change talks in the nation´s capital, has proposed that global emissions peak by 2020, according to a Reuters report.”

Bloomberg writer Gavin Evans reported yesterday that, “Australian Prime Minister Kevin Rudd’s climate-change legislation faces a renewed fight in the Senate as he prepares to hold talks in Washington today with President Barack Obama on global warming.

“The upper house will reconvene to discuss the bill after failing to meet a deadline for its passage last week. Rudd and Obama have both encountered hurdles in their respective senates to enacting legislation they can showcase at the global climate- change conference in Copenhagen next month.”

Trade

Yesterday, USDA’s Economic Research Service and Foreign Agricultural Service released a report titled, “Outlook for U.S. Agricultural Trade,” which stated that, “Fiscal 2010 agricultural exports are forecast at $98 billion, up $1 billion from the August forecast and $1.4 billion above final FY 2009. Though the forecast is below the record 2008 level, exports are expected to be the second highest ever.”

Meanwhile, with respect to the Doha Round of WTO trade talks, an item posted yesterday at the International Centre for Trade and Sustainable Development reported that, “Day one of the WTO’s Seventh Ministerial Conference saw WTO officials and trade ministers from a wide range of member governments set the stage for a push to conclude the beleaguered Doha Round negotiations by the end of 2010.

But there are no signs that the divisions that have bedeviled the talks for most of their eight years are abating.”

The update added that, “This quickly became apparent during the opening plenary Monday afternoon.

“‘We have made our specific interests well known: that meaningful market opening is required to complete the round,’ said US Trade Representative Ron Kirk, who was one of the first speakers. He strongly implied that much of this market opening needed to come from ‘key emerging markets,’ in barely veiled references to countries like Brazil, China, and India.

“Minutes later, Celso Amorim, Brazil’s foreign minister, countered that emerging economies had already put considerable market access on the table. ‘It is unreasonable to expect that concluding the round would involve additional unilateral concessions from developing countries,’ he said.”

Reuters writers Jonathan Lynn and Laura MacInnis reported yesterday that, “[Amb.] Kirk told the conference the United States was ready to move into the final stages of negotiations — provided agreement led to real new market opportunities in manufacturing and services as well as farming, the main focus of poor countries.

“He repeated America’s call for big emerging countries like China and India to open their markets further to secure a deal.”

Biofuels

An update posted yesterday at the Government Accountability Office (GAO) Online stated that, “In response to concerns about the nation’s energy dependence on imported oil, climate change, and other issues, the federal government has encouraged the use of biofuels. Water plays a crucial role in all stages of biofuel production–from cultivation of feedstock through its conversion into biofuel. As demand for water from various sectors increases and places additional stress on already constrained supplies, the effects of expanded biofuel production may need to be considered. To understand these potential effects, GAO was asked to examine (1) the known water resource effects of biofuel production in the United States; (2) agricultural conservation practices and technological innovations that could address these effects and any barriers to their adoption; and (3) key research needs regarding the effects of water resources on biofuel production. To address these issues, GAO reviewed scientific studies, interviewed experts and federal and state officials, and selected five states to study their programs and plans related to biofuel production. GAO is not making any recommendations in this report [report highlights; full report]. A draft of this report was provided to the Departments of Agriculture (USDA), Energy (DOE), and the Interior (DOI); and the Environmental Protection Agency (EPA). USDA, DOE, and DOI concurred with the report and, in addition to EPA, provided technical comments, which were incorporated as appropriate.

The extent to which increased biofuels production will affect the nation’s water resources depends on the type of feedstock selected and how and where it is grown. For example, to the extent that this increase is met from the cultivation of conventional feedstocks, such as corn, it could have greater water resource impacts than if the increase is met by next generation feedstocks, such as perennial grasses and woody biomass, according to experts and officials.”

Also yesterday, an update posted yesterday at the AgMag Blog (The Environmental Working Group) stated that, “Growth Energy, a corn ethanol lobby group, is grossly exaggerating the economic benefits that a higher ethanol blend in the nation’s fuel supply would bring.

“The group claims that granting its petition to increase the amount of ethanol blended into gasoline from 10 percent to 15 percent would create an additional 136,101 ‘green jobs’ [related news release].

“Our analysis shows that only 12,000 to 27,000 jobs would be created at a cost to taxpayers of between $195,000 and $446,000 per job per year for a total cost of $5.4 billion per year. Other independent analysts suggest that 38,000 jobs would be created at the cost of $139,000 per job per year.”

Crop Insurance

An update posted yesterday at the USDA’s Risk Management Agency’s (RMA) webpage stated that, “[RMA] has released the results of a periodic review of RMA’s premium rating methodology. Over the past several years, RMA has engaged contractors and conducted internal assessments of various elements of its premium rating methodology. In 2009, RMA undertook a comprehensive review of all aspects of the Actual Production History (APH) and revenue rating methodologies.

“RMA is releasing the draft report received under this contract, as well as prior contracted studies and internal RMA reviews considered, on its web site for review and comment. The report, ‘A Comprehensive Review of the RMA APH and COMBO Rating Methodology Draft Final Report’ and other studies are available at: http://www.rma.usda.gov/pubs/

Ag Communications

Rod Smith reported yesterday at Feedstuffs Online that, “To get their message out today, food producers need to have an entirely new sense of urgency and need to use an entirely new set of alliances and tools, according to one specialist in issues management.

“‘The (communications) landscape has changed dramatically,’ he said, whereby a ‘story’ can leap from a cell phone photo or video to You Tube in seconds, and food producers need ‘a parallel response.’

“This requires first a desire to actually respond, then alliances with interests that are not traditional to agriculture, then capabilities to communicate plus outreach that transmit messages consistently, continuously and rapidly, explained George Clark, director of the issues and crisis group at Burson-Marsteller in Washington, D.C.

Food producers need this response because activism is occurring on a broader frequency that’s more opposed to agriculture and conventional food production than ever, he said.”

Keith Good

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