Energy Emissions and Agriculture

As H.R. 2454, the American Clean Energy and Security Act, is deliberated in Congress, Agriculture Secretary Tom Vilsack and other farm-industry leaders are promoting the inclusion of agriculture offsets in its provisions.

The legislation, also known as the “climate change bill” and the “Waxman bill,” on behalf of Democratic Chairman Henry Waxman, seeks an 80-percent reduction of carbon dioxide and other greenhouse-gas emissions from the atmosphere by 2050. The bill accomplishes this using a cap-and-trade system with government-issued pollution allowances, or permits, to businesses that are tradable in the open market.

However, the bill has neglected to consider offsets specific to the farm industry.

“Energy companies, oil refineries, wildlife advocates, etc., all receive something in this bill,” said Rick Krause, American Farm Bureau Federation (AFBF) senior director of congressional relations. “It seems like the only industry that was not addressed in this bill was agriculture."

Opponents cite elevated production costs that will incur as a result of increased fuel, fertilizer and energy costs, as validation for some type of agricultural-offsets program.

"A viable carbon offsets market – one that rewards farmers, ranchers and forest landowners for stewardship activities – has the potential to play a very important role in helping America address climate change while also providing a possible new source of revenue for landowners," said Vilsack.

Producers will be taxed for surpassing allotted emissions standards and rewarded with carbon-capture credits if utilizing sustainable agriculture practices such as no-till farming and methane-capturing equipment.

AFBF President Bob Stallman urged congressional members to think not only about, “…mitigating the impact of higher energy costs but assuring that, whatever and however possible, we maximize the role of agricultural producers in any climate policy, including maximizing the opportunities to reduce and sequester carbon.”

Agriculture contributes 7 to 10 percent of greenhouse-gas emissions, according to Vilsack.

Stallman advocates the implementation and oversight of legislation to be conducted by the United States Department of Agriculture (USDA). Vilsack concurs with Stallman and stated that the USDA is better suited to monitor the bill than the proposed Environmental Protection Agency because of its size and scope.

Twelve agricultural groups (American Farmland Trust, American Soybean Association, National Association of Wheat Growers, National Cattlemen's Beef Association, National Corn Growers Association, National Farmers Union, National Milk Producers Federation, National Association of Conservation Districts, National Council of Farmer Cooperatives, Public Lands Council, United Fresh Produce Association and the Western Growers Association) have endorsed a list of "principles" for the bill which, if included, would sanction their consent of its passage.

What potential issues may arise for the industry as a result of this pending legislation? Are all farm sectors treated equally? Is the federal government being fair to the agriculture community?

AgJOBS Bill

It cannot be denied that migrant workers, any person laboring outside of his or her country, have contributed to America’s agricultural landscape throughout the years. Undocumented agricultural workers have worked within all sectors of the industry, including grain, dairy, fishing, produce and meatpacking.

Increases of imported labor are evident throughout history during times of war and economic uncertainty. World War II introduced the concept of provisional legal residency with the Bracero Program, which allowed thousands of Mexican laborers to work in the U.S. to alleviate agricultural labor shortages.

The Agricultural Job Opportunities, Benefits and Security Act, or “AgJOBS bill,” restructures and reforms the current H-2A temporary agricultural worker program – a type of visa issued to temporary guest workers in agriculture. The bill would grant applicants a “blue card,” signifying short-term legal residency.

“This amendment provides a consistent, stable workforce for an industry that depends almost exclusively on undocumented labor – agriculture,” said California Sen. Diane Feinstein, who introduced the bill to Congress mid-May.

About 1.35 million undocumented farm workers will be granted amnesty if Congress passes the AgJOBS bill.

According to the Geneseo Migrant Center, a nonprofit organization that coordinates programs to benefit migrant farm workers and their families, 81 percent of today’s farmhands are foreign-born, 77 percent are Mexican.

Provisions of the AgJOBS bill include:
• A two-year history of U.S. farm work for applicant
• A cap of 1.5 million blue cards in five years (without a per-year cap)
• Ability for family members to receive temporary residency
• An additional three-to-five-year work requirement, upon completion of initial labor period, to become eligible to apply for a green card for permanent legal residency

According to Feinstein’s Web site, California has experienced a 20-percent reduction of workers in its harvesting crews. Proponents of the bill argue that guest workers contribute to the timely return of seasonal and specialty crops. Because of the worker shortage, as many as 13,280 farms nationwide were forced to terminate operations within the past year. Feinstein claims passage of this legislation would alleviate worker shortages and secure America’s agricultural revenue.

“Today across the United States, there are not enough agricultural workers to pick, prune, pack or harvest our country’s crops. With an inadequate supply of workers, farmers from Maine to California and from Washington State to Georgia, have watched their produce rot and their farms lay fallow throughout the years,” said Sen. Feinstein.

Opponents argue that the bill is a temporary solution to a long-term immigration problem.

“While the H-2A program is reformed, it’s still a very cumbersome program and it especially is not going to help those smaller employers who need a few employees for a short period of time, four to six weeks, throughout the year,” said American Farm Bureau Federation (AFBF) Labor Specialist Ron Gaskill. “So it still doesn’t help them.”

Others dislike the idea of rewarding people that initially entered the U.S. illegally and are weary that applicants will skirt legal processes and use the bill as a loophole to either remain in or enter the country undocumented.

Gaskill offers opinions about the pros and cons of the proposed legislation in an AFBF-produced R.S.S. video.

Are there disadvantages/causes of concern associated with this bill? Should other provisions be included? Is the bill in the best interest of American agriculture?

Plummeting Milk Prices

America’s 57,000 dairy farmers witnessed elevated milk prices in 2007 and 2008. But as we entered 2009, decreased export demand, costly herd upkeep and oversupply caused milk prices to drop rapidly.

"Call it globalization,” said Roger Hoskin, a dairy analyst at the U.S. Agriculture Department's Economic Research Service. “When the export market is strong, they do well; when the export market is weak, domestic use is not enough.”

Besides selling it by the gallon, milk is sold for national and international use in processing other dairy products such as butter, yogurt and ice cream. Remaining product is converted to powdered milk, cheese and whey.

American Agriculturist cites 2007 conventional milk prices at $20 per hundredweight while pricing today’s average at $11 per hundredweight. The average price for a gallon of milk has declined 14.7 percent in the past 12 months, from $3.87 to $3.32, according to figures from the U.S. Bureau of Labor Statistics’ Consumer Price Index. Dairy farmers are receiving 35 percent less than what they were paid last fall.

The health of commodity markets determines a dairy farmer’s dividends.

Unlike other farm sectors that can store excess product for future sale, dairy producers are forced to sell their product immediately.

Dairy operators are reducing herd sizes to decrease milk production and to save money on animal feed and care, and have also resorted to selling cows at fire-sale prices, or significantly lower-than-average market prices, to stay afloat. According to a USA Today article, there has been a 20 percent increase in cow slaughters from last year.

California, America’s No.1 dairy state producing $7 billion annually or one-fifth of the U.S.-milk supply, is receiving the blunt of the industry storm. California Gov. Arnold Schwarzenegger proclaimed June 2009 as “Real California Milk Month” in efforts to boost industry sales.

To assist a floundering market, the federal government is purchasing dairy products to normalize price levels and is allocating its purchases to national food banks and nutrition programs, as well as donation programs abroad.

The state of the U.S. economy isn’t helping matters. With increasing numbers of farmers in all commodities seeking loans, dairy farmers cannot depend on receiving financial assistance for security as in years past.

The National Milk Producers Federation (NMPF), a nationwide conglomerate of dairy farmers and cooperatives, is working to promote the demand of dairy consumption and the vitality of the American dairy industry.

How can the dairy industry reinvigorate interest in its products? Will milk prices stabilize if/when the global recession recovers? Should other farm industries be on the defense after witnessing the beef, pork and now dairy sectors experiencing a threatened existence?