Tuesday, December 08, 2009

Cap-and-Tax Bad for Farmers, Rural America

This week the Agriculture Subcommittee on Conservation, Credit, Energy, and Research held two important hearings to learn more about the economic impact of climate change legislation. Witnesses at the hearing included the chief economist from the U.S. Department of Agriculture as well as members of academia. They highlighted and discussed various studies that have been completed on the costs of cap and trade on the agriculture industry. Although these studies make different assumptions or have different end results, the overwhelming conclusion from each one is that the cost to agriculture is real. Our farmers and ranchers have much to lose and very little, if anything, to gain. During the hearing, Dr. Joseph Glauber from USDA said, “there is no question that agriculture is an energy intensive sector… [and] agriculture will be hit by higher energy costs.” Another witness, Dr. John M. Antle from Montana State University, testified that the current economic studies “have tended to under-emphasize the costs of adaptation” for farmers. Dr. Patrick Westhoff from the Food and Agricultural Policy Research Institute added that “the House-passed legislation would raise energy costs and this would translate into higher farm production expenses.” It is expected that higher energy prices and higher operating costs will decrease farm income anywhere from $5 billion to $50 billion per year. Dr. Glauber also testified that a cap and trade program would dramatically reduce livestock production by double digits by 2050, which is particularly alarming. If USDA’s analysis is true then U.S. agriculture will no longer be able to provide food security for the U.S. population, which is expected to grow by 130 million Americans by 2050...read more

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