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Agriculture and Climate Change Legislation; Chairman Peterson; Livestock Production and Antibiotics; Food Safety Issues-Peanuts; and Trade Issues (Ethanol Tariff)
Climate Change- Background
The Associated Press reported yesterday that, “Day after day, reports of the dangers of climate and climate change circulate in the news, often filled with confusing data and debate.
“In an effort to improve understanding of climate science, a group of government agencies has combined efforts to produce ‘Climate Literacy: The Essential Principles of Climate Science.’”
The AP article explained that, “The guide was organized by the National Oceanic and Atmospheric Administration, parent agency of the climate center, along with the departments of Agriculture, Commerce, Defense, Energy, Health and Human Services, Interior, State, Transportation and the Environmental Protection Agency, National Aeronautics and Space Administration, National Science Foundation, Smithsonian Institution, U.S. Agency for International Development and the American Association for the Advancement of Science.”
Climate Change Legislation- Revenue
Keith Johnson, writing yesterday at the Environmental Capital Blog (The Wall Street Journal) reported that, “The first Obama administration budget estimated that revenues from a future cap-and-trade program would total $646 billion through 2019.
“Now, the WSJ reports that the White House actually expects to raise two to three times as much revenue from the climate bill. That would appear to mean that prices for emissions permits will be a lot higher than anyone is expecting—which would be both good news and bad news.
“Jason Furman, deputy director of the National Economic Council, told Senate staffers in late February that the plan could raise two to three times as much as the official budget figures, or between $1.3 trillion and $1.9 trillion, the WSJ reports.”
Mr. Johnson noted that, “So the climate plan could cast its net wider and cover a broader spectrum of the American economy. The more sectors that are bound to reduce emissions, and thus buy carbon permits, the bigger the revenues. The problem there is that most of the blueprints in Washington for climate legislation already talk about ‘economy-wide’ cap-and-trade schemes—not much scope to make economy-wide even wider.
“That leaves carbon-emissions permits that are simply more expensive than the lowish prices that have been bandied about so far. To make the White House math work, the government would have to sell the same number of permits at prices ranging from $20 to more than $40 a ton.”
Climate Change Legislation- Lawmaker Perspectives
There appears to be no shortage of variables to debate with respect to any potential climate change legislation- from the quality and veracity of the science that would be the philosophical cornerstone of any new law, to whether or not potential costs to agricultural producers would outweigh gains- or if “green-based payments” have the capacity to replace some forms of Title I farm subsidies, or would be limited to just a supplemental source of alterative income, policymakers will certainly hold wide-ranging views on many aspects of this complex issue as the climate change debate garners more focus and attention.
At this preliminary stage, however, some lawmakers have expressed their clear political perspective on the general notion of climate change legislation and agriculture.
In an audio update posted yesterday at the Illinois Corn Growers Online, Rep. John Shimkus (R-IL) indicated that, “[So] what policymakers are doing here so that they don’t scare rural America, they are saying okay, but of all this cap and trade revenue, of all this [$686] billion in tax revenue over ten years, you are going to get a piece of that, and you are going to get a piece of that through carbon credits, through no-till applications…whatever they want to say. I caution be careful who you negotiate with and think that you are going to break even. I don’t anything government does is designed to cause anyone to break even. I think this is an extreme environmentalist left agenda, I don’t support it, and I sure hope my friends in the community, whether it’s the corn growers, or the other ag groups or whether it’s the coal industry don’t get suckered into buying into an agreement that is going to do more harm than good.”
To listen to this audio segment, just click here (MP3- one minute thirty seconds).
Also yesterday, on The AgriTalk Radio Program with Mike Adams, Rep. Jo Ann Emerson (R-Missouri) weighed in on the issue of “cap and trade,” where she noted in part that, “Now the only experience that we’ve seen in this is what Europe has, and they have a cap and trade program that is not doing well, and so I think it is a stupid idea…[and]…I think that our very safe and abundant food supply could be in peril by a cap and trade program, as I think it could be with a carbon tax as well, just a straight forward carbon tax.”
To hear more of Rep. Emerson’s comments from yesterday’s AgriTalk program, just click here (MP3- four minutes).
Meanwhile, an item from yesterday’s Bridges Weekly Trade News Digest (“Trade Issues Emerge as Climate Policy Hits US Agenda“) reported that, “With a new administration in power and a major international conference on the horizon, climate change policy has re-emerged on the agenda in the US Congress. But as the much-anticipated issue takes centre stage, some politicians are already calling for trade barriers to help US industry cope with anticipated challenges if a cap-and-trade scheme is introduced.
“Perhaps the most notable concern regarding US President Barack Obama’s proposed US emissions trading policy came from US Senator Sherrod Brown, who says that a climate change bill should include tariffs to protect domestic manufacturers. ‘If a US company, say a steel mill in Ohio, if their cost goes up dramatically for cutting carbon, it’s one more reason to think they’re not going to be competitive…they lose jobs,’ Brown said during a recent speech at US think-tank Worldwatch Institute.”
The Bridges article noted that, “[President] Obama does support the granting of subsidies through a climate bill, specifically for renewable energy, which could make the legislation more appealing to wavering Congress members. But recent studies show that such subsidies would significantly increase the cost of the emissions policy. Also, some US policymakers are demanding extra incentives for their states, such as permit price caps and returned revenue from the sale of permits.
“Within the Republican Party, opposition is considerable. Lisa Murkowski, a senator and member of the Senate Energy and Natural Resources Committee, has advised against a hasty drafting of a climate change policy bill. ‘To merge energy and climate change legislation and pass the bill this year would likely founder because of strong differences among lawmakers over ways to control greenhouse gas emissions and allocate the costs,’ Murkowski said earlier this week.
“Evidently there are divergent views throughout the US Congress about how and when to draft a climate change bill, which is being watched closely by the international community.”
Chairman Peterson
House Agriculture Committee Chairman Collin Peterson (D-Minnesota) was also a guest on yesterday’s AgriTalk Radio Program.
In wide-ranging discussion with host Mike Adams, Chairman Peterson offered his perspective on climate change legislation and agriculture and reminded listeners that his Committee has solicited the opinion of stakeholders to gather information on the issue by gleaning responses to a questionnaire on the subject.
Chairman Peterson stated that, “We have undertaken an effort to define how agriculture could fit into whatever kind of climate change bill ends up coming out. And we feel like we need to get ahead of this and layout how agriculture can contribute to reducing our carbon footprint, which we think there is a lot that we could do, and are doing currently that is not being recognized…[w]hatever ends happening here, I think there is a very good possibility that agriculture will come out neutral or may even actually benefit from a system like this.”
To listen to a longer and more complete audio segment from Chairman Peterson’s appearance yesterday on AgriTalk, where he also talked about the executive branch agricultural budget proposal, and food safety issues, just click here (MP3- eight minutes).
Livestock Production and Antibiotics
The Los Angeles Times editorial board indicated in today that, “A year and a half ago, researchers found that a deadly form of staph infection was prevalent on Canadian pig farms. This year, the superbug was found in both swine and workers at U.S. farms.
“The rise of bacteria such as methicillin-resistant Staphylococcus aureus, or MRSA, which kills more people in this country each year than AIDS, is believed to be a consequence of the overuse of antibiotics in humans and animals. Low doses of the medications have become ubiquitous in the livestock industry, mixed into feed to enhance growth and prevent the diseases that sweep through crowded pens.”
The LA Times opinion item added that, “The European Union has already banned non-therapeutic use of antibiotics in farm animals, but each year lobbying by agribusiness in this country dooms legislation that would do the same. On Tuesday, Rep. Louise M. Slaughter (D-N.Y.) introduced a bill that would restrict the use of antibiotics that are important to human health in farming operations. The medications could be used to treat illness, but not as a growth promoter or as a substitute for cleaner living conditions. The bill might have a better chance of passing now, with a stronger Democratic majority in Congress.
“The timing is right in other ways as well. In January, the Department of Agriculture — responsible for promoting the meat industry as well as consumer health — reported that, except during the nursery stage for young pigs, the costs of using preventive or growth-promoting antibiotics slightly outweighed the economic benefits for farms. That’s not counting the added costs to consumers in prescription prices for more exotic antibiotics or the $4 billion a year this country spends to combat resistant infections. Some farms are successfully using better sanitation and tracking of illnesses among their herds instead of preventive antibiotics.
“It would be a mistake to delay restrictions on antibiotic use until the situation has a chance to reach dire proportions; there is no guarantee that specialized antibiotics could be developed in time to thwart a new wave of drug-resistant bacteria. Humans don’t need antibiotics to treat common colds, which are caused by viruses rather than bacteria, and animals don’t need them to grow.”
Food Safety Issues- Peanuts
The Associated Press reported today that, “It’s not just consumer groups anymore that say the U.S. food safety system is broken.
“The head of Kellogg Co., the world’s largest cereal maker, planned to urge Congress on Thursday to revamp how the government polices his industry. Kellogg lost $70 million in the recent salmonella outbreak, after it had to recall millions of packages of peanut butter crackers and cookies.
“Chief executive David Mackay wants food safety placed under a new leader in the Health and Human Services Department. He also called for new requirements that all food companies have written safety plans, annual federal inspections of facilities that make high-risk foods and other reforms.”
AP writer Greg Bluestein reported yesterday that, “After Georgia-made peanut products were named as the culprit in a nationwide salmonella outbreak, state lawmakers have moved quickly on a bill to make Georgia the first to require food makers to swiftly alert state inspectors if their internal tests show their products are tainted.”
The article noted that, “The state’s peanut industry is estimated to employ 50,000 people and to have an annual estimated impact of $2.5 billion.”
And a report posted yesterday at WVIR-TV (Virginia) pointed out that, “The state agriculture department is hoping to reassure shoppers that Virginia peanuts are safe to eat.
“The department says last year’s widespread salmonella outbreak is making it tough for Virginia farmers. Concerned shoppers are leaving peanut products on the shelves. The state agriculture commissioner says those worries might have a lingering effect on Virginia peanuts, which he says are safe.”
“The commissioner says people just aren’t buying peanut products and that could help lead to a 50 percent drop in Virginia peanut production this year,” the update noted.
Trade Issues (Ethanol Tariff)
A news release issued yesterday by Sen. Dianne Feinstein (D-California) stated that, “U.S. Senators Dianne Feinstein (D-Calif.), Judd Gregg (R-N.H.), Jeff Bingaman (D-N.M.), Susan Collins (R-Maine), Maria Cantwell (D-Wash.) and Mel Martinez (R-Fla.) have introduced a bipartisan measure to reduce the tariffs on imported ethanol. This would enable U.S. refiners to purchase cheaper and more environmentally-friendly ethanol from foreign sources.
“Here’s why this legislation is necessary: the enacted 2008 Farm Bill lowered the ethanol blender subsidy from 51 cents to 45 cents per gallon. At the same time, the Farm Bill left in place two tariffs on imported ethanol: a primary tariff set at 2.5 percent of the transaction price; and a secondary tariff, fixed at 54 cents per gallon. This change created a real barrier to trade on foreign ethanol imports, ranging between 11-13 cents per gallon, depending on the wholesale price of ethanol on a given day. This means that gasoline imports are favored over ethanol imports.
“The measure (S.622) would ensure parity between the ethanol blender subsidy and the two tariffs on imported ethanol. Specifically, it would require the President to lower the ethanol tariff at least 11 cents per gallon within 30 days of enactment.”
Meanwhile, Reuters writer Doug Palmer reported yesterday that, “The U.S. Senate voted overwhelmingly on Wednesday to approve former Dallas Mayor Ron Kirk to be U.S. trade representative, three months after President Barack Obama tapped him for the job.”
And a news release issued yesterday by the European Commission stated that, “EU Trade Commissioner Catherine Ashton has delivered a speech at the Carnegie Endowment in Washington, DC, in which she calls on the EU and US to stand up for open trade in the economic downturn. She argues that a commitment to open markets is as important in the current economic crisis as determining the right fiscal stimulus and financial regulation, as trade creates growth and jobs. Commissioner Ashton concludes that the EU and US must show leadership both in the multilateral trade arena as well as in tackling bilateral trade issues, in order to help lift the global economy out of recession.”
In other developments, the AP reported today that, “U.S. officials are assessing the cost of new Mexican tariffs that take effect Thursday in retaliation for a U.S. decision to cancel a cross-border program that gave Mexican truckers access to their northern neighbor’s highways.”
The AP article explained that, “The tariffs apply to 36 agricultural and 53 industrial products, including onions, strawberries, shampoo, toothpaste, pet food, books, pencils and dishwashers. The only item facing a 45-percent tax is fresh grapes. Some 55 other products will be taxed at 20 percent, and the remaining 33 items at 10 to 15 percent.
“NAFTA normally exempts agricultural products from such duties.
“The U.S. Department of Agriculture was still assessing the cost of the tariffs.”
And Bloomberg writer Mark Drajem reported today that, “Mexico spared Ford Motor Co. and Tyson Foods Co. from $2.4 billion in tariffs on U.S. imports that take effect today, deciding instead to target growers of potatoes, cherries and pears.
“Fruits and vegetables are the most common items on the list of 90 products hit with tariffs as Mexico retaliated against a U.S. decision to block Mexican trucks from traveling north of a commercial zone along the border.”
Mr. Drajem added that, “Potato growers alone could lose an annual market of $80 million, said John Keeling, chief executive of the National Potato Council in Washington. ‘This thing has to be fixed,’ Keeling said. ‘It’s unconscionable that Congress let this happen.’”
The Wall Street Journal editorial board added today that, “California, an important supplier of fresh fruits, dried fruits and nuts to Mexico, will be hit hard. Table grapes will face a 45% duty at the Mexican border; wine, almonds and juices among other agricultural products will pay 20%. Some 90% of Christmas-tree exports from California and 65% from Oregon go to Mexico. It’s doubtful volumes will hold up beneath a 20% tariff.”
Keith Good
