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Climate Issues; UN Food Summit; and the U.S. Agricultural Economy
Climate Issues
The AP reported on Friday that, “President Barack Obama is calling on all nations to accept responsibility for fighting climate change.
“But he says he’s not expecting that it will be easy to reach an agreement at a climate change summit next month in Copenhagen.
“Speaking in Tokyo, Obama said nations that are the biggest emitters must set clear targets for reducing those emissions. And he said developing countries will need to take substantial actions of their own.”
However, Helene Cooper reported in yesterday’s New York Times that, “President Obama and other world leaders have decided to put off the difficult task of reaching a climate change agreement at a global climate conference scheduled for next month, agreeing instead to make it the mission of the Copenhagen conference to reach a less specific ‘politically binding’ agreement that would punt the most difficult issues into the future.
“At a hastily arranged breakfast on the sidelines of the Asia-Pacific Economic Cooperation summit meeting on Sunday morning, the leaders, including Lars Lokke Rasmussen, the prime minister of Denmark and the chairman of the climate conference, agreed that in order to salvage Copenhagen they would have to push a fully binding legal agreement down the road, possibly to a second summit meeting in Mexico City later on.
“‘There was an assessment by the leaders that it is unrealistic to expect a full internationally, legally binding agreement could be negotiated between now and Copenhagen, which starts in 22 days,’ said Michael Froman, the deputy national security adviser for international economic affairs. ‘I don’t think the negotiations have proceeded in such a way that any of the leaders thought it was likely that we were going to achieve a final agreement in Copenhagen, and yet thought that it was important that Copenhagen be an important step forward, including with operational impact.’”
Yesterday’s article explained that, “The agreement on Sunday codifies what negotiators had already accepted as all but inevitable: that representatives of the 192 nations in the talks would not resolve the outstanding issues in time. The gulf between rich and poor countries, and even among the wealthiest nations, was just too wide.
“Among the chief barriers to a comprehensive deal in Copenhagen was Congress’s inability to enact climate and energy legislation that sets binding targets on greenhouse gases in the United States. Without such a commitment, other nations are loath to make their own pledges.
“Administration officials and Congressional leaders have said that final legislative action on a climate bill would not occur before the first half of next year.”
Jonathan Weismam, Spencer Swartz and Stephen Power reported today at The Wall Street Journal Online that, “Some longtime observers of climate negotiation expressed concern that by tamping down expectations for next month’s summit, world leaders have eased pressure on concluding a deal anytime soon. They said a protracted delay would make it harder to reduce carbon emissions down the road, because wind and other alternative-energy producers want to see political and legal commitments in public policy before making additional investments.”
Today’s Journal article pointed out that, “The Copenhagen announcement also illustrates the political difficulty of negotiating limits on industrial greenhouse-gas emissions, as countries grapple with a weak global economy and concerns that emission caps could drive up energy prices.”
John M. Broder reported in today’s New York Times that, “President Obama came into office pledging to end eight years of American inaction on climate change under President George W. Bush, and all year he has promised that the United States would lead the way toward a global agreement in Copenhagen next month to address the warming planet.
“But this weekend in Singapore, Mr. Obama was forced to acknowledge that a comprehensive climate deal was beyond reach this year;” and now, the article noted, “The admission places Mr. Obama in the awkward position of being, at least for now, as unlikely to spearhead an international effort to combat global warming as his predecessor — if for different reasons.”
Mr. Broder pointed out that, “Yet Mr. Obama has found himself limited in his ambitions by a Congress that is unwilling to move as far or as fast as he would like.
“American negotiators have been hamstrung in talks leading to the Copenhagen conference by inaction on legislation supported by the administration that would impose strict caps on carbon dioxide emissions. The House passed a relatively stringent bill in June, but the Senate is not expected to begin serious debate on the measure until next year.
“Without a firm commitment from the United States — for decades the world’s leading emitter of climate-altering gases — other nations have been reluctant to deliver firmer pledges of their own. Mr. Obama’s aides say he remains determined to use his domestic authority and international clout to continue pressing toward a global agreement despite the latest setback.”
Jim Tankersley reported in today’s Los Angeles Times that, “By acknowledging over the weekend that the world would have to wait at least until next year for a legally binding treaty to curb global warming, President Obama and fellow Pacific Rim leaders dramatically lowered expectations for next month’s climate negotiations in Copenhagen.
“Yet, in the process, White House officials and many environmentalists say, the leaders may have boosted the chances for the U.S. Congress to pass landmark limits on greenhouse gas emissions — and for the world to act in time to stave off the worst projected effects of rising temperatures.”
Mr. Tankersley explained that, “Critics say it could drain the pressure from the United States and China to agree to legally binding action any time soon. But Obama administration officials and many environmentalists say it could do the opposite, sending dominoes tumbling in Washington and around the world toward an agreement.
“Here’s their logic: The House has already passed a climate bill. Scaled-back action in Copenhagen could help push a Senate bill over the top by securing pledges for emissions reductions from China and India, and thereby reassuring moderate Rust Belt Democrats. Moreover, by coming to some sort of agreement in Copenhagen, negotiators could continue building momentum toward a final agreement, rather than deflating the ongoing talks.”
Nonetheless, Lisa Lerer reported on Friday at Politico.com that, “An aggressive White House push on jobs and deficit reduction in 2010 may be yet another sign that climate-change legislation will stay on the back burner next year.
“‘There is a growing chorus in the party that thinks we should be doing more to spur job creation and not necessarily tackle cap and trade right now,’ said a moderate Democratic Senate aide.”
Friday’s article added that, “White House officials told POLITICO on Friday that President Barack Obama plans curb new domestic spending beyond jobs programs and focus on cutting the federal deficit next year.
“In the Senate, Majority Leader Harry Reid has hinted that Democrats plan to take up a job-creation bill, in the wake of the announcement of a 10.2 percent unemployment rate. In the House, some lawmakers are beginning to push a major highway bill for next year to focus on job creation.
“None of this is promising for a major climate change bill.”
With respect to potential activity in the Senate Agriculture Committee on climate change, Agri-Pulse Senior Editor Stewart Doan appeared on the AgriTalk Radio Program with Mike Adams on Friday and offered his perspective on this issue. To listen to this brief clip from Friday’s AgriTalk program with Stewart Doan and Mike Adams, just click here (MP3-1:40).
UN Food Summit
The AP reported today that, “For the third time in less than a decade, a U.N. food summit will grapple with what so far has been an elusive goal – slashing the number of the world’s hungry.
“Pope Benedict XVI will be among the opening speakers Monday, adding his moral authority to what U.N. officials hope will be a solid start to a new strategy to help poor countries to produce enough to feed their own.
“One in six people on the planet is now hungry, U.N. officials say.”
The AP article stated that, “So far, helping the world’s hungry has largely entailed wealthy nations sending food assistance rather than technology, irrigation help, fertilizer or high-yield seed that could assist local farmers, livestock herders and fishermen. Much of this food assistance is purchased from the wealthy nations’ own farmers.
“But the U.N. Food and Agriculture Organization, which is hosting this week’s gathering at its Rome headquarters, says the best way to stop hunger is to help the needy help themselves.”
DTN Political Correspondent Jerry Hagstrom reported on Friday (link requires subscription) that, “In what may be interpreted as a signal of the administration’s commitment to providing agricultural development assistance rather than food aid to developing countries, President Barack Obama has designated the U.S. Agency for International Development rather than USDA to lead the U.S. delegation to the U.N. World Summit on Food Security next week in Rome.”
Mr. Hagstrom pointed out that, “Acting USAID Administrator Alonzo Fulgham, a career officer, is expected to head the delegation, a White House source said. On Tuesday, President Obama nominated Agriculture Undersecretary for Research, Economics and Education Rajiv Shah to be USAID’s administrator, but he has not gone through the Senate confirmation process.
“Agriculture secretaries from Dan Glickman in the Clinton administration to Ann Veneman and Ed Schafer in the Bush administration have led U.S. delegations to previous food summits, which focus on reducing world hunger through both agricultural development and food aid. Agriculture Secretary Tom Vilsack is scheduled to remain in Washington and testify Wednesday at a Senate Agriculture Committee hearing on the reauthorization of domestic child nutrition programs.”
An editorial regarding the UN summit and food security was published late last week in the Financial Times (“A hungry world will not wait.”)
In part, the FT opinion item indicated that, “International summits often produce more photo-opportunities than progress. That could be the fate of next week’s World Food Summit. Pre-meeting talks have removed two targets from the draft of the declaration to be signed then. This weakens its force and urgency at the very moment that past advances are being lost.
“There are more than 1bn chronically undernourished people in the world, mostly in Africa and south Asia. The proportion of undernourished people in the developing world has risen to almost one in five – the level of 1990.
“Other factors make the outlook worse. Climate change is creating unpredictable weather patterns, making farming more difficult, while pressure to protect the environment inhibits use of fertilisers. As countries become more urbanised, food shortages can more easily cause political instability.”
The opinion piece stated that, “Agriculture’s share of official development aid was less than 4 per cent in 2006, down from about 17 per cent almost 30 years ago. Funds cannot simply be switched from food aid. Yet without long-term schemes to boost local food production, food aid perpetuates the problem.
“Developing countries need investment in research on agricultural techniques, and better irrigation, storage and transport facilities. The $20bn food security initiative by the Group of Eight in July was the right move but will need sustained political will to be effective.
“Some global companies have realised that recent food shortages and steep price rises are a structural change rather than a blip. Their plans to develop sustainable farming in developing countries are good policy as well as commercial sense. But governments too have a critical role, providing agricultural aid and promoting well-functioning global food markets. They must not lag behind.”
In a related item, Philip Brasher explored the importance of future corn yields in an article that was published in yesterday’s Des Moines Register (“2050 corn harvest will affect food, fuel policies.”)
In part, Mr. Brasher stated that, “What corn yields are likely to be in 2050 matters a lot when the government is debating far-reaching energy policies that could take land out of crop production and encourage more biofuel production in the United States and globally. The lower the yields, the more these policies could squeeze food supplies and drive up prices worldwide.
“The U.S. Department of Agriculture, which bases its projections on long-term historical trends, sees moderate growth, with yields reaching about 240 bushels an acre in 2050.
“But scientists with the biotech seed giant Monsanto Co. have been telling economists and government officials that yields could be far higher – as much as 300 bushels per acre by 2030.
“The difference between those two projections is huge. With an average yield of 300 bushels per acre, U.S. farmers could have produced as much corn as they did this year on just 43 million acres. This fall, they’re harvesting 79 million.
“‘It’s hard to overstate how important this is,’ University of Missouri economist Pat Westhoff said of the corn yield projections.”
Mr. Brasher noted that, “Looking at what has happened to U.S. corn yields over the last decade would suggest that the USDA is too conservative. Farmers are expected to harvest 162.9 bushels per acre this year, an increase of nearly 22 percent from 1999.
“But how much of that increase is because of good weather and how much is because of improvements in crop varieties and biotechnology? [Note: see a related study on this question by University of Illinois Economists from February of 2008]. In 2004, the average yield jumped to a record 160.3 bushels, only to slump to 147.9 bushels the next year.
“Joe Glauber, the USDA’s chief economist, said it’s too soon to tell whether yields will increase in the long term at a higher rate than they have been. ‘I don’t think there’s enough evidence yet that we’ve seen this gigantic increase in yields,’ he said.”
U.S. Ag Economy
Christine Laue reported in Saturday’s Omaha World Herald that, “After two years of steep increases, Nebraska farmland values fell in the third quarter from a year ago, according to regional bankers in a survey.
“Compared with the same quarter a year ago, non-irrigated farmland values in Nebraska dropped 4.8 percent; irrigated farmland values fell 4.7 percent; and ranchland values declined 5.3 percent.
“‘After posting some of the steepest annual increases in farmland values over the last two years, Nebraska values have moderated somewhat in 2009,’ said Brian Briggeman, an economist with the Federal Reserve Bank of Kansas City, Mo.”
Saturday’s article added that, “After two years of historically high farm incomes, the farm income index has followed a downward trend throughout 2009. In the third quarter, the farm income index was below 50, its lowest level since early 2003.
“The capital spending index, which also reached a survey low, followed a similar track, as lower incomes further curtailed equipment purchases.
“Farm credit conditions also eroded.
“The third-quarter index of loan repayment rates fell further, reaching its lowest level since early 2003. And the index of loan renewals and extensions jumped to its highest level in six years.”
Keith Good
