FarmPolicy

January 22, 2020

Climate Issues; Chairman Peterson, Lincoln; and the Ag Economy

Climate Issues: Focus on Agriculture

Reuters writer Charles Abbott reported yesterday that, “Overall, the U.S. farm sector will gain more than it would lose under the House-passed climate bill, a Kansas State University review of six studies of the legislation said on Thursday.

All of the studies said that costs of production would rise and in the short run per-acre profitability may decline, but, for the most part, the declines will be modest.

On the plus side, the bill exempts agriculture from emission caps, has provisions to ease the transition to higher fertilizer prices and offers the chance of revenue from development of a carbon offset market.”

Mr. Abbott indicated that, “In such markets, polluters who find it too pricey to cut their own emissions could pay farmers to store carbon in soil or by growing trees.

“Revenue from carbon contracts ‘could be substantial,’ the review said, depending on which practices are eligible.”

Included in the KSU review were studies by think tanks at Texas A&M University, the University of Tennessee, the University of Missouri, Iowa State University, Duke University and the Agriculture Department,” the Reuters article said.

Meanwhile, House Agriculture Committee Ranking Member Frank Lucas (R-Oklahoma) was a guest on yesterday’s AgriTalk Radio Program with Mike Adams.

In part, Rep. Lucas expressed overall concern with respect to climate legislation and recent EPA action and the potential negative impact these environmental policies could have on the agricultural sector.

To listen to an excerpt from yesterday’s AgriTalk show with Mike Adams and Rep. Lucas on these issues, just click here (MP3-4:59).

DTN Ag Policy Editor Chris Clayton reported on Wednesday (link requires subscription) that, “When charting a course for long-term sustainability in agriculture, farmers face the challenges of doubling world food production while coming to grips with the environmental framework needed to address climate change, a key executive from Deere & Co. told attendees of DTN/The Progressive Farmer’s Ag Summit Wednesday.

David Everitt, president of Deere’s Agriculture and Turf Division for North America, Asia, Australia, and Sub-Saharan and South Africa, and Global Tractor and Turf Products, gave a lesson in how agriculture must respond to the growing demands of food, sustainability and environment in his keynote speech Wednesday evening as the DTN/The Progressive Farmer Ag Summit in Chicago.

“Along with feeding an increasing global population, farmers also have to help reduce the world’s dependence on fossil energy by providing renewable fuels. Then, agriculture must also take into account climate change, ‘both its effects on production agriculture around the globe and the effects of measures that worldwide governments will likely adopt to improve conditions,’ Everitt said.”

Mr. Clayton indicated that, “Acknowledging that the topic of climate change is controversial, Everitt said agricultural leaders at Deere feel ‘it is necessary to have a strong and engaged voice’ on climate change as governmental policy is being crafted to protect the interest of its customers. Deere also is a member of the EPA’s Climate Leaders program and the U.S. Climate Action Partnership.

“‘Now, I do understand some may not agree with that approach, we feel that it is vitally important to be engaged in this important discussion and to have a prominent seat at the table as policy is being defined,’ Everitt said. Deere has been working to reduce its own carbon footprint. Everitt said it is possible to have a good outcome while reducing emissions. And it’s a ‘bigger danger’ to let some environmental and other non-governmental groups attempt to push policy without agriculture’s participation.”

Climate Issues: Domestic Framework Draft

Wall Street Journal writer Ian Talley reported today that, “A trio of senators seeking to break a congressional deadlock on climate legislation unveiled a proposal Thursday that combines caps on greenhouse-gas levels with new offshore oil-and-gas exploration and nuclear power plant incentives. [A video replay of the Senator’s press conference from yesterday can be viewed here, while a short audio clip from yesterday’s briefing featuring Sen. Kerry can be heard here (MP3-2:00)].

“The outline offered by Sens. John Kerry (D., Mass.), Lindsey Graham (R., S.C.), and Joe Lieberman (I., Conn.) won praise from President Barack Obama who called it a ‘positive development.’”

The Journal article indicated that, “But it’s unclear whether the Kerry-Graham-Lieberman proposal will win over Democrats from heartland states and Republicans opposed to adopting caps on U.S. carbon emissions. Senate Majority Leader Harry Reid has put off consideration of a climate bill until spring and is focusing attention on health care and jobs.

“Asked if there were any other Republican senators close to joining the three-senator group, Sen. Graham laughed and said, ‘No.’

“An aide to Sen. Kerry said, however, that talks were ongoing with a raft of different senators to try to win support and draft language that would win the 60 votes necessary to pass in the chamber.”

John M. Broder reported yesterday at The Green Inc. Blog (The New York Times) that, “The proposal was timed to help persuade delegates to the United Nations climate change conference in Copenhagen that the Senate is serious about passing a climate bill and not mired in a partisan morass.”

Mr. Broder also pointed out that, “Separately, a pair of moderate senators, Maria Cantwell, Democrat of Washington, and Susan Collins, Republican of Maine, said that they would unveil a competing global warming proposal on Friday.”

Meredith Shiner reported yesterday at Politico.com that, “Their [Sens. Kerry, Lieberman and Graham] basic outline includes provisions on nuclear power, regulating the carbon market, reducing dependence on foreign oil and ensuring a future for coal as an energy source.

“In both their letter and at their press conference, the senators emphasized the consensus on the importance of promoting clean energy policy, despite reservations about the impact of carbon taxes frequently expressed by Republicans.

Senate Minority Leader Mitch McConnell (R-Ky.) said in a press conference Wednesday that climate change legislation is one of several ‘jobs killing’ measures being considered in the Senate. But, Graham said proponents could build a compelling case to win over his GOP colleagues.”

David A. Fahrenthold and Juliet Eilperin reported in today’s Washington Post that, “The trio of senators who are trying to write a bill to cap greenhouse gas emissions released a ‘framework’ Thursday that they had agreed to.

It showed they had not agreed to very much.”

Climate Issues: President Obama

Reuters writers David Fogarty and Aasa Christine Stoltz reported yesterday that, “President Barack Obama urged world leaders on Thursday to break the deadlock at climate change talks in Copenhagen, although many nations accused the United States of lacking ambition.

“In a move that could boost Obama’s position when world leaders join the U.N. talks next week, three U.S. senators outlined a compromise climate bill on Thursday that aims to win the votes needed for passage next year.

“Accepting his Nobel Peace Prize in neighbouring Norway, Obama warned of dire consequences if the world did nothing to curb rising carbon emissions from burning fossil fuels and deforestation which scientists say are heating up the atmosphere.”

In part, President Obama stated that, “There is little scientific dispute that if we do nothing, we will face more drought, more famine, more mass displacement — all of which will fuel more conflict for decades. For this reason, it is not merely scientists and environmental activists who call for swift and forceful action — it’s military leaders in my own country and others who understand our common security hangs in the balance.”

To listen to a brief overview of the President’s remarks from yesterday regarding climate change, as well as a short comment from Agriculture Secretary Tom Vilsack, click on this USDA Daily Radio News Service item from yesterday.

Climate Issues: U.S. Perspectives at Copenhagen

Louise Roug reported yesterday at Politico.com that, “Interior Secretary Ken Salazar joined the Obama administration’s charm offensive in Copenhagen on Thursday.”

The article quoted Sec. Salazar as saying, “I’m here in today in Copenhagen on behalf of President Obama to deliver a simple message: The United States of America understands the danger that climate change poses to our world, and we — as a nation — are committed to confronting that challenge. Together with our partners in the international community, we will help build strong, achievable carbon reduction strategies for our planet.” [A complete transcript of Sec. Salazar’s comments from yesterday can be viewed here].

The Politico article added that, “Salazar is just the latest in a string of Obama administration officials to make the pilgrimage to Copenhagen — and he’ll hardly be the last. Environmental Protection Agency Administrator Lisa Jackson briefed conference participants Wednesday, and Commerce Secretary Gary Locke is due Friday.”

Meanwhile, Amy Harder reported yesterday at the National Journal’s Energy & Environment Blog that, “Rep. Edward Markey, D-Mass., told reporters today he thinks ‘it’s great’ that Senate Environment and Public Works ranking member James Inhofe, R-Okla., and other GOP lawmakers skeptical of climate change are going to Copenhagen next week. ‘It could be good for Senator Inhofe to be exposed to the consensus that the world has reached on this issue,’ said Markey, chairman of the Select Committee for Energy Independence and Global Warming and co-sponsor of the House climate bill.”

The AP reported yesterday that, “Sen. Jim Inhofe, R-Okla., said Wednesday he plans to travel to a 192-nation climate conference in Europe next week to tell participants that a U.S. government proposal to reduce greenhouse gas emissions 17 percent by 2020 has little support in the Senate.

“‘My presentation will be the unique one,’ said Inhofe, a climate change skeptic who is investigating allegations that some scientists manipulated data to provide proof of global warming. ‘They’re not even close on votes in the United States Senate.’

“Inhofe, the senior Republican on the Senate Environment and Public Works Committee, also said he plans to ask for an independent investigation into e-mails leaked from climate scientists that Inhofe said provide evidence that some researchers suppressed data and stifled dissent on global warming.”

The AP article added that, “The Environmental Protection Agency said Monday that scientific evidence shows greenhouse gases threaten public health and that the pollutants should be reduced. The announcement coincided with the opening of an international conference on climate change in Copenhagen, Denmark, sponsored by the United Nations.

Inhofe said he plans to travel to the conference next week and inform participants that an overwhelming number of U.S. senators are opposed to new emission standards proposed by the EPA. Complying with the standards would cost billions of dollars and would lead to higher utility costs and job losses, he said.

“‘No consensus will come out of Copenhagen,’ Inhofe said. Inhofe believes emissions, mainly carbon dioxide from burning fossil fuels, have little effect on the climate and that any gradual change is the result of natural climate cycles.”

With respect to other officials traveling to Copenhagen, Molly K. Hooper reported earlier this week at The Hill Online that, “A political scuffle has broken out about which lawmakers will be allowed to go to Copenhagen, Demark, on a congressional delegation led by Speaker Nancy Pelosi (D-Calif.).

“Days before legislators are scheduled to discuss global warming at a climate change summit, accusations flew about the politics of who gets a codel invitation.”

After a detailed discussion, The Hill article indicated that, “Rep. Edward Markey (D-Mass.), chairman of the Select Committee on Energy Independence and Global Warming, and Rep. Henry Waxman (D-Calif.), chairman of the Energy and Commerce Committee, plan to attend. House Agriculture Committee Chairman Collin Peterson (D-Minn.), who was something of a headache for Democratic leaders in pressing for farm-friendly provisions in the climate bill before the House vote, is also expected to attend.”

Chairman Peterson: Re-Election; Financial Regulations

In more detailed news regarding Chairman Peterson, Emily Cadei reported earlier this week at CQPolitics.com that, “Ten-term Rep. Collin Peterson (D-Minn.) is one of more than a dozen Democrats Republicans are hoping to send to retirement in 2010. The GOP started licking their chops when Peterson refused to confirm with absolute certainty to local Minnesota press that he would run for re-election next year.

“Peterson, who won his 7th district seat with 72 percent of the vote in 2008, told CQ-Roll Call Wednesday that he has filed his paperwork for a run, but that he never makes ‘a final decision until February.’

“‘I’m not doing anything different’ he said.”

Eric Roper reported this week at the Minneapolis Star Tribune Online that, “More than a year after a historic financial collapse nearly derailed the U.S. economy, Minnesota Democrat Collin Peterson has emerged as an unlikely player on Capitol Hill in crafting legislation to bring Wall Street to heel.

“A former small-town accountant and onetime farmer, Peterson has spent a lifetime mastering the financial web that undergirds the nation’s farm economy. Now he has waded into the thick of an attempt to bring order to vast swaths of the financial sector that operated for years without oversight.”

The article stated that, “Peterson’s role may seem an odd one for a House Agricultural Committee chairman, but derivatives have a long history in agriculture, and that makes Peterson particularly well-suited to take aim at Wall Street’s power players.”

Later, the Star Tribune article explained that, “After months of committee work, Peterson is in the final stages of crafting a bill with Financial Services Committee Chairman Barney Frank that would require OTC derivatives transactions to be approved by regulated clearinghouses and would force much of the trading onto open exchanges. A committee staffer said it is slated for a vote this week and will be combined with several other pieces of legislation geared toward the financial collapse.”

Dow Jones writer Sarah N. Lynch reported yesterday that, “The U.S. House agreed by voice vote on Thursday to include sweeping new regulations for over-the-counter derivatives into a larger bill to overhaul the financial regulatory system.

“The section of the bill on swaps regulation, which represents a compromise between the chairmen of the House Financial Services and Agriculture committees, targets primarily dealer banks and major players in the swaps market whose trading could pose potential risks.”

And a House Agriculture Committee news release from yesterday stated that, Today, the House of Representatives passed a key amendment to a financial regulatory reform bill that would bring accountability to unregulated over-the-counter derivatives for the first time. The House passed the bipartisan Peterson-Frank amendment to H.R. 4173, the Wall Street Reform and Consumer Protection Act of 2009, by voice vote.

“The amendment establishes a central clearing requirement for participants in the over-the-counter derivatives market while preserving the use of derivatives for end users to hedge price risks associated with their businesses.

“‘Bringing these unregulated credit derivatives under the central clearing model that has served the regulated futures markets well for decades will increase transparency in the marketplace and reduce the systemic risk that over-the-counter derivatives can pose to the economy if left unchecked,’ said House Agriculture Committee Chairman Collin C. Peterson of Minnesota.”

Sen. Agriculture Committee Chairman Blanche Lincoln (D-Arkansas)

And in news regarding the Senate Ag Committee Chairman, the AP reported yesterday that, “The former president of the Arkansas Farm Bureau says he’s seeking the Republican nomination to challenge Democratic Sen. Blanche Lincoln next year.

“Stanley Reed said Thursday that he plans to join the crowded field of Republicans hoping to run against Lincoln. Reed, a cotton farmer from Marianna, is also the former chairman of the University of Arkansas System Board of Trustees.

“Lincoln, a Democrat, is seeking a third term in the Senate next year. So far, seven Republicans have announced they’re seeking the Senate nomination.”

Ag Economy

The Federal Reserve Bank of Dallas recently released a report titled, “Agricultural Survey: Quarterly Survey of Agricultural Credit Conditions in the Eleventh Federal Reserve District.”

In part, the report stated that, “Bankers responding to the third-quarter survey reported that the ongoing drought continues to manifest challenges for the Eleventh District agricultural community. Poor grazing conditions and water shortages have forced cattle producers to liquidate much of their herds. The lack of moisture has also resulted in poor crop yields for many dryland farmers. On a positive note, recent rains have somewhat improved growing conditions in several regions of the district.

“District bankers are feeling the pinch as well. Thirty-eight percent of those responding noted a decline in loan demand. One-fourth of respondents reported falling loan repayment rates, up from 11 percent a year earlier. Additionally, a higher share of bankers said they anticipate making fewer crop storage, feeder cattle, operating and dairy loans next quarter compared with year-ago levels.

“Farmland prices continued to weaken in the third quarter. Dryland and irrigated land values edged down, and 26 percent of respondents said they expect farmland values to fall over the next three months. This is an increase from last quarter, when only 17 percent expected a decline in land prices.”

Keith Good

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