by PHILIP BRASHER • pbrasher@dmreg.com • August 2, 2009
Washington, D.C. - Forget the food-vs.-fuel debate for a while. The new issue is carbon vs. food.
How this debate plays out could go a long way to deciding the fate of the Obama administration's effort to reduce U.S. greenhouse gas emissions.
The debate over a House-passed climate bill has focused on how much it will raise energy costs, including the cost of farming. When the Senate returns this fall to write its version of the bill, attention will turn to the impact on food prices.
This became clear at the Senate Agriculture Committee's first hearing on the climate issue. Senators from both parties demanded to know what impact a cap-and-trade system would have on land use and food costs. Economists at the U.S. Department of Agriculture are working to learn the answers.
The issue is simple: A cap-and-trade program, such as the one approved by the House, would allow utilities and other polluters to comply with caps on greenhouse gas emissions by purchasing credits from landowners who plant trees on their property.
The question is how much land that's now in crops or pasture is likely to be converted to forests.
Quite a bit, according to the Environmental Protection Agency's analysis of the House-passed bill. The analysis predicted there would be less cropland as a result of the bill because acreage would be converted to trees to earn carbon credits.
Reducing the amount of available cropland likely would raise the price of commodities such as corn and soybeans, increasing feed costs and eventually food prices.
Estimate of affected acres
But the environmental analysis, based on work done at Texas A&M University, didn't say how land conversion would take place, and agency administrator Lisa Jackson, hasn't clarified the issue.
She told the Senate committee she had no idea how many acres of cropland would be affected.
Enter the American Farm Bureau Federation. The group, which flatly opposes the cap-and-trade program, came up with an estimate that 40 million acres could be lost to agricultural production. Some 320 million acres nationwide were planted to crops this year.
Senate Republicans seized on the Farm Bureau figures and used it to attack the House bill.
But Farm Bureau economists said the number is at best a guess. The number is based on the environmental agency estimate of the amount of emissions reduction that would be achieved through agriculture and forestry under the House's cap-and-trade program.
However, most of the emission reduction in the early years would come through improvements in managing existing forests - not through planting trees on land that's now in grass or crops.
Vilsack weighs in
Agriculture Secretary Tom Vilsack said the lost acreage, however much it is, isn't likely to be good cropland, and farmers can make up for it with higher yielding crop varieties and more efficient feed use.
"I'm not willing to concede that (cap-and-trade) will necessarily result in an acre-for-acre reduction" in cropland, Vilsack said.
But without more economic analysis, Vilsack is trying to sell the climate bill on a "hope and a prayer," said Sen. Mike Johanns, a Nebraska Republican and former agriculture secretary.
A leading farm-state Democrat, Blanche Lincoln of Arkansas, told Vilsack and Jackson she needs to know more about the potential impact of the legislation on food prices.
In a first step to getting the answer, Agriculture Department economists huddled for two days recently with counterparts at Texas A&M who developed the environmental agency's analysis.
The issues the Agriculture Department economists have to sort through are complex and not unrelated to the food-vs.-fuel issue.
Biofuels mandates, for example, encourage crop residue to be used for ethanol, not left in the soil where the plant carbon can reduce greenhouse gas emissions - and earn carbon credits.
Mandates for energy
Then there's the issue of a new mandate for renewable electricity. Will that encourage land to be converted from food crops to switchgrass to fuel power plants?
If so, that could mean higher food prices, too.
The economists' goal is to come up with estimates of how much cropland and acreage will be converted to trees, not just nationwide but by region and commodity.
"If you can start doing that on a regional basis and commodity basis, you can get a little more complete story," said Joe Glauber, the Agriculture Department's chief economist.
How this debate plays out could go a long way to deciding the fate of the Obama administration's effort to reduce U.S. greenhouse gas emissions.
The debate over a House-passed climate bill has focused on how much it will raise energy costs, including the cost of farming. When the Senate returns this fall to write its version of the bill, attention will turn to the impact on food prices.
This became clear at the Senate Agriculture Committee's first hearing on the climate issue. Senators from both parties demanded to know what impact a cap-and-trade system would have on land use and food costs. Economists at the U.S. Department of Agriculture are working to learn the answers.
The issue is simple: A cap-and-trade program, such as the one approved by the House, would allow utilities and other polluters to comply with caps on greenhouse gas emissions by purchasing credits from landowners who plant trees on their property.
The question is how much land that's now in crops or pasture is likely to be converted to forests.
Quite a bit, according to the Environmental Protection Agency's analysis of the House-passed bill. The analysis predicted there would be less cropland as a result of the bill because acreage would be converted to trees to earn carbon credits.
Reducing the amount of available cropland likely would raise the price of commodities such as corn and soybeans, increasing feed costs and eventually food prices.
Estimate of affected acres
But the environmental analysis, based on work done at Texas A&M University, didn't say how land conversion would take place, and agency administrator Lisa Jackson, hasn't clarified the issue.
She told the Senate committee she had no idea how many acres of cropland would be affected.
Enter the American Farm Bureau Federation. The group, which flatly opposes the cap-and-trade program, came up with an estimate that 40 million acres could be lost to agricultural production. Some 320 million acres nationwide were planted to crops this year.
Senate Republicans seized on the Farm Bureau figures and used it to attack the House bill.
But Farm Bureau economists said the number is at best a guess. The number is based on the environmental agency estimate of the amount of emissions reduction that would be achieved through agriculture and forestry under the House's cap-and-trade program.
However, most of the emission reduction in the early years would come through improvements in managing existing forests - not through planting trees on land that's now in grass or crops.
Vilsack weighs in
Agriculture Secretary Tom Vilsack said the lost acreage, however much it is, isn't likely to be good cropland, and farmers can make up for it with higher yielding crop varieties and more efficient feed use.
"I'm not willing to concede that (cap-and-trade) will necessarily result in an acre-for-acre reduction" in cropland, Vilsack said.
But without more economic analysis, Vilsack is trying to sell the climate bill on a "hope and a prayer," said Sen. Mike Johanns, a Nebraska Republican and former agriculture secretary.
A leading farm-state Democrat, Blanche Lincoln of Arkansas, told Vilsack and Jackson she needs to know more about the potential impact of the legislation on food prices.
In a first step to getting the answer, Agriculture Department economists huddled for two days recently with counterparts at Texas A&M who developed the environmental agency's analysis.
The issues the Agriculture Department economists have to sort through are complex and not unrelated to the food-vs.-fuel issue.
Biofuels mandates, for example, encourage crop residue to be used for ethanol, not left in the soil where the plant carbon can reduce greenhouse gas emissions - and earn carbon credits.
Mandates for energy
Then there's the issue of a new mandate for renewable electricity. Will that encourage land to be converted from food crops to switchgrass to fuel power plants?
If so, that could mean higher food prices, too.
The economists' goal is to come up with estimates of how much cropland and acreage will be converted to trees, not just nationwide but by region and commodity.
"If you can start doing that on a regional basis and commodity basis, you can get a little more complete story," said Joe Glauber, the Agriculture Department's chief economist.
