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Sunday, May 29, 2016

Flimsy evidence supporting cap-and-trade

Thursday, August 27, 2009

Agriculture Secretary Tom Vilsack's August 23 op-ed about cap-and-trade offered incomplete and largely speculative analysis to justify the costs to American farmers and ranchers. His rhetoric falls in line with the Administration's pattern of nice sounding ideas unsupported by facts. Unfortunately, the costs of cap-and-trade are real, while so far the benefits for farmers and ranchers are theoretical. Nebraska producers are realists. And realists sift through rhetoric to focus on facts.

I commend the secretary for acknowledging that energy costs will go up and rural America is more likely to feel the pinch. But nowhere does his column acknowledge how many acres would come out of production under cap-and-trade, nor would the Secretary answer that question when posed by the Senate Agriculture Committee in a hearing last month. Isn't that a basic question?

The fact is, the Farm Bureau estimates that 40 million acres will come out of production and another analysis predicts a loss of 78 million acres to trees. That's nearly 20 percent of our nation's total cropland. The Secretary's argument appears to hedge on one of two options: America's farmers have the land, time, and resources to increase their acreage by 20 percent; or they can convert 20 percent of current cropland to trees without a significant loss in output and income. Neither option makes sense.

The Secretary suggests farmers and ranchers would "embrace" the "new opportunities" presented by cap-and-trade. I asked a full week before our hearing to be provided with analysis for all of American agriculture, including state-by-state projections. What analysis did we get? No estimate of the impact of increased costs on livestock production. This industry represents 57 percent of ag income in Nebraska, and more than 50 percent of ag sales nationwide--apparently hog, cattle and poultry are not "agriculture" by the Administration's definition. No state-by-state analysis of the impact of cost increases on agriculture production. Nebraska producers pay costs based on local prices, not national averages. And nothing regarding the fruit and vegetable industry, representing 15 percent of ag sales nationwide. So let's add that up--USDA's analysis ignores roughly two-thirds of American agriculture. Yet they unequivocally state this is good for American agriculture?

Furthermore, USDA has assumed free allowances will be sufficient to keep fertilizer prices from rising, but provides no explanation for how many allowances fertilizer will need. In a recent letter, the Fertilizer Institute called this portion of the analysis "incorrect and misleading." USDA has failed to model the total impact of the bill, focusing on only a few hundred of the bill's 1427 pages.

Lastly, the Secretary fails to mention perhaps the most critical point: the bill fails to achieve its purported environmental goal of stopping climate change because agriculture producers and manufacturing in China, India, and Brazil are in no way covered by the bill. Without them, the impact on temperature is negligible, a fact acknowledged by the Environmental Protection Agency. It's also worth noting that the Secretary wholeheartedly supported the bill long before he "instructed" USDA staff to review its impact. One wonders if the incomplete analysis accounts for the Secretary's support, or if the analysis was instead driven by the support.

So what are we left with? A bill that places additional tax burdens on American businesses during a severe recession for no discernible environmental gain. A bill that asks Nebraskans to trust the federal government to provide enough free allowances so the increased energy costs will not put them out of business. Like the Secretary, I am supremely confident that American agriculture can adapt. But that's no justification to support a bad bill. While Americans will face down any challenge facing them, their lawmakers should not be in the business of creating additional ones.

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Sen. Mike Johanns
Sen. Mike Johanns
U.S. Sen. Mike Johanns is a former U.S. Secretary of Agriculture, Nebraska governor and Lincoln mayor.

Address: 404 Russell, Senate Office Building, Washington, DC 20510

Phone: (202) 224-4224
Fax: (202) 228-0436

You may contact Senator Johanns by emailing mike_johanns@johanns.senate.gov. If you would like to receive a response from Senator Johanns, please ensure you include your name, full address, and phone number.