Posted by:  Matt Dempsey Matt_Dempsey@epw.senate.gov

Over the last week, agriculture took center stage in the climate debate, as some in Congress threatened to derail the Waxman-Markey bill over, among other things, the Obama Administration’s biofuels policy.  This ag-fueled drama heightened concern within the agricultural community about cap-and-trade and greenhouse gas regulation—and the devastating impacts both would have on farms.   The negative consequences of carbon regulation for American farmers are undeniable.  But don’t take our word for it: EPW Policy Beat sorted through the regulatory docket on EPA’s Advanced Notice of Proposed Rulemaking (ANPR) to regulate greenhouse gases under the Clean Air Act (CAA).  There we found numerous comments filed by farm groups staunchly opposed to CAA regulation.  A few themes predominate: CAA regulation will mean new, burdensome taxes and fees on farms; CAA regulation will be a futile attempt to address a global problem through controls on American farms; and CAA regulation will destroy farming jobs and force many farms out of business. 

The following are excerpts from comments submitted by farm groups:

Georgia Farm Bureau

“It is our understanding the USDA has stated that any farming operation with more than 25 dairy cows, 50 beef cattle, or 200 hogs will emit more than 100 tons of the carbon equivalent. If the envisioned ANPR were to go into effect, nearly all livestock operations in the United States will have to get a permit under Title V to continue to operate.  Some estimates are available on the fee structure of the permits and are based on EPA’s ‘presumptive minimum rate’ and USDA statistics. These estimates range as high as $175 per dairy cow per year, $87.50 per beef animal per year; and $20 per hog per year! Farmers cannot afford such a punitive tax!”   

“We believe the imposition of this rule would lead to less livestock production in the United States. Less production in this country would lead to more importation of livestock products from other countries. The end results would be more greenhouse gas production countries where livestock practices are not as environmentally sound as in this country. The bottom line might very well be that a segment of American agriculture is dismantled while greenhouse gases, on a global scale, are increased.”  Link to Document

Illinois Farm Bureau 

“Fees (or taxes) on cows and hogs would impose a significant added cost for dairy, beef and hog producers that cannot easily be absorbed. Most farmers will be unable to pass along these costs. Imposition of such costs may cause many farmers to go out of business. GHG regulation under the Clean Air Act will adversely impact all farmers. Regulation of various aspects of agricultural operations may be extensive and place huge economic burdens on farmers. Regulation of other economic sectors will result in increased fuel, fertilizer and energy costs for all farmers.”

“Regulating a ton in the United States without addressing emissions in other countries would do little to address the global issue, and would only penalize producers in the United States.  For sectors of American agriculture vulnerable to foreign imports, the regulations may cause livestock production to increase in other parts of the world to keep up with global demand.  American consumers would be purchasing and consuming less domestically-produced product and more foreign-produced product.”  Link to Document

Kentucky Cattlemen’s Association 

"Regulation of the ton emitted in Kentucky will have no environmental impact unless the regulation can also prevent an additional ton from being emitted in China or anywhere else in the world. It cannot. As mentioned earlier, these proposed regulations could very well shift production to other countries where emissions would actually increase per unit production.”

“I fear the net effect of this policy if enacted would be to impose severe penalties on livestock producers in the United States without effectively reducing greenhouse gas levels in the atmosphere.”  Link to Document

North Dakota Dept. of Agriculture

“Agriculture provides not only the food and fiber of America, but is the largest offset provider against human activity.  A healthy agricultural landscape provides clean air, water, and open space. If the programs contemplated by the ANPR are ultimately proposed and adopted, we firmly believe that it will place a staggering cost on agricultural producers, consumers, and the U.S. economy–all with little or no environmental benefit. We urge you to carefully consider agriculture’s needs as we continue to enhance environmental protection while maintaining a viable farm production system.” Link to Document

Michigan Farm Bureau 

“If greenhouse gas regulations as envisioned by the ANPR went into effect, Michigan agriculture would be dramatically impacted, negatively. Nearly one-third of the hog and beef farms and over 70 percent of the dairy farms would be affected. Depending on the cost of the fee, these requirements could eliminate livestock agriculture in Michigan. Furthermore, educational institutions (i.e., high school agri-science and land grant universities) with livestock farm components would be faced with superfluous financial burdens.”

“The principal contributor to the ongoing contraction of the U.S. live cattle industry is the lack of profitability for independent U.S. cattle producers – a problem that would be greatly exacerbated if the industry were saddled with yet another regulatory cost under the hypothetical regulation of greenhouse gas emissions under the Clean Air Act.” Link to Document

New York Farm Bureau 

“The impact to New York’s dairy industry would be devastating. The cost per year for New York (627,000 mature dairy cattle X $175.00 per cow) would be a staggering $109,725,000 million. There is little doubt that this would result in a significant loss of our dairy industry and working farmland, as well as put up an insurmountable barrier to entry into the dairy industry for our young farmers.”

Link to Document

Arkansas Farm Bureau 

“According to the SEIT worksheet just 33.3 acres of rice would trigger the small emitter threshold of 100 tons which would envelop 100% of Arkansas rice production. This equates to a ‘fee’ of $131.25 per acre.  Arkansas average acreage planted to rice has been approximately 1.3 million acres equating to a potential annual ‘fee’ of $170,625,000…Combining the potential ‘fees’ for rice production and soil management brings the annual total to over $1.4 billon.”

“Compared to other states known for their dairy and swine production, Arkansas is mostly small farms. Small farms do not have the economies of scale to absorb these costs and do not have the ability to pass these costs up the supply chain. The end result will be the forced extinction of many more small farms.”  Link to Document

Texas Farm Bureau 

“For many farmers the imposition of taxes of this magnitude would force them out of business.” Link to Document

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Posted by: Matt Dempsey (202) 224-9797 Matt_Dempsey@epw.senate.gov

 In Case You Missed It… 

Follow the Science on Yucca 

Link to New York Times Editorial

May 21, 2009

The administration’s budget for the Energy Department raises a disturbing question. Is President Obama, who has pledged to restore science to its rightful place in decision making, now prepared to curtail the scientific analyses needed to determine whether a proposed nuclear waste repository at Yucca Mountain in Nevada would be safe to build?

It is no secret that the president and the Senate majority leader, Harry Reid, who hails from Nevada, want to close down the Yucca Mountain project, which excites intense opposition in the state. The administration has proposed a budget for fiscal year 2010 that would eliminate all money for further development of the site, and Mr. Reid has pronounced the project dead.

But the administration at least claimed that it would supply enough money for the Energy Department to complete the process of seeking a license from the Nuclear Regulatory Commission, if only to gain useful knowledge about nuclear waste disposal. Unfortunately, the budget released this month looks as if it will fall well short of the amount needed.

Money for the Yucca Mountain project, nearly all of which is used to support the licensing application, would fall from $288.4 million in 2009, the current year, to $196.8 million in 2010, a precipitous drop. And the agency intends to rely heavily on its own staff personnel rather than on more costly outside consultants from the national laboratories or private contractors. There is great danger that the department will lack the expertise needed to answer tough technical questions that emerge during the regulatory commission’s reviews.

These ramp-downs are occurring at the worst time. The regulatory commission is just beginning its licensing process, which is scheduled to take three to four years, and its relevant boards have ruled that at least eight intervenors can raise some 300 issues for technical challenges, an unusually high number. The cutbacks increase the odds that the agency will stumble in trying to justify a license — or that the hearings and evaluations won’t be completed within statutory deadlines.

Meanwhile, the administration, Congressional leaders and the nuclear industry are calling for a blue-ribbon panel to study alternative ways to dispose of nuclear waste. Surely it would be useful for any such panel to know whether the Yucca Mountain project was sound or flawed.

Before approving this truncated budget, Congress needs to ensure that it contains enough money to sustain a genuine licensing effort. We have no idea whether Yucca Mountain would be a suitable burial ground for nuclear wastes. But after the government has labored for more than two decades and spent almost $10 billion to get the site ready for licensing hearings, it would be foolish not to complete the process with a good-faith evaluation. Are Mr. Obama and Mr. Reid afraid of what the science might tell them?

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