June 25, 2009

Climate change bill will negatively impact agriculture industry

WASHINGTON—The American Clean Energy and Security Act of 2009, the current climate change bill in Congress, will negatively impact agriculture by raising production costs and lowering farm income.

“The outcome will unquestionably have an enormous impact on U.S. agriculture,” said Wilmer Stoneman, associate director of governmental relations for the Virginia Farm Bureau Federation. “The climate change bill, H.R. 2454, is bad for agriculture and bad for farmers.”

The U.S. House of Representatives is expected to vote on the bill before the fourth of July Congressional holiday. And the U.S. Department of Agriculture has not had enough time to calculate the actual cost to farmers.

If the bill passes, it will create higher fuel, fertilizer and energy costs for farmers, Stoneman said. And while U.S. farmers are paying higher costs, foreign competitors will not have to do the same, putting American farmers at a competitive disadvantage.

“The potential for tremendous harm to U.S. agriculture is real,” Stoneman said. “All of agriculture will suffer from higher production costs.”

Economic impact estimates of the bill from the Environmental Protection Agency and The Heritage Foundation fluctuate widely.

“No one really knows the actual cost of this legislation versus the benefit to the environment,” said Spencer Neale, senior assistant director of commodity marketing for the Virginia Farm Bureau. “But there is no doubt there will be a cost.”

The Heritage Foundation, a conservative think tank promoting public policy research and analysis, predicted that the climate bill would lower farm profits by 28 percent over the next three years and as much as 57 percent by 2035.

The problem is that no concrete cost-benefit analysis of the bill has been conducted, Neale said. The initial costs may not seem that severe, but the impact of the bill will continue through 2050, which is the time all requirements are to be implemented. The regulations include an 83 percent reduction in carbon emissions over 2005 levels aimed at targeted industry sectors such as electric utilities and oil companies.

Contact Stoneman at 804-290-1024 or Neale at 804-290-1153.