11/2/2009
By Amy Bickel/The Hutchinson News
The dreams by proponents are many for a state reliant on agriculture.


They see wind turbines rising from wheat fields and farmers selling offsets for practices like no-till farming and new grass plantings. Meanwhile, they say, dairies and feedlots could reap a paycheck by installing devices to trap methane - all in an effort to cut greenhouse gas emissions.

Some in the Farm Belt, however, aren't quite so positive about current climate change legislation under debate in Washington. That includes the American Farm Bureau Federation, which announced a campaign against the proposed cap and trade program called "Don't Cap our Future."

Farm Bureau urges its members in a grassroots effort not just to send letters to their politicians, but also to deliver their Farm Bureau ball caps, signed with the demand.

The worry is expense. Even some farm state lawmakers are concerned that it could mean some producers would go out of business.

"It has significant consequences to Kansas and Americans, even more so when it comes to agriculture producers and rural America," U.S. Rep. Jerry Moran, R-Kan., told The News shortly before the House bill passed in June. "There would be a significant increase in prices of gasoline, the price of electricity, the price of fertilizer and the price of natural gas and propane - things we use in significant amounts in agriculture and in rural America."

A report by Sens. Kit Bond, R-Mo., and Kay Bailey Hutchison, R-Texas, show that under House climate change legislation, America's farmers and ranchers would be hit with $550 million in higher fuel costs in 2020 and $1.65 billion in 2050.

"It reduces (farmers') profits by increasing costs," said Steve Swaffer, director of natural resources for the Kansas Farm Bureau. "If you want to pay $12 or $15 for a loaf of bread at the grocery - that's the extreme, but that is the road we are headed down.

"Everyone's fuel costs will go up, everyone's electric will go up. A new dishwasher will cost more - anything that is a manufactured process will cost more."

Other side of the coin

Just how expensive a climate change bill will be is anyone's guess. However, Secretary of Agriculture Tom Vilsack and National Farmers Union President Roger Johnson insist the benefits of climate change legislation outweigh the costs of expensive inputs like seed, fuel and fertilizer.

Johnson, who visited The News in May, said the boon for farmers is the potential to receive payments on the market for their conservation efforts to trap greenhouse gas emissions - one way to help with the increased energy costs. Offsets include projects that would sequester carbon in the atmosphere - such as new grass plantings, no-till farming or capturing methane from large livestock operations.

Moreover, proponents like Johnson say the legislation is helping protect what could happen on the Great Plains if temperatures rise, which could range from floods to famines, according to the Environmental Protection Agency.

"We believe it's just a matter of time before the U.S. joins the rest of the world and does something with climate change," Johnson said. "We believe this something is cap and trade."

Meanwhile, while other industries emissions are part of the proposals in Washington, so far, agriculture's own emissions are not regulated under the bills, Swaffer said.

As part of the Stern Review, the British government's global look at the economics of climate change, agriculture makes up 14 percent of the world's greenhouse gas emissions.

Specifically, methane from ruminant livestock produce about 80 million metric tons of methane gas across the globe on an annual basis, accounting for about 28 percent of global methane emissions from human-related activities. In the United States, cattle emit about 5.5 million metric tons of methane per year, accounting for 20 percent of U.S. methane emissions, according to the EPA.

In addition, according to the Stern Review, while climate changes in Canada, Russia and other higher-latitude countries may result in better agricultural yields, developed countries in lower latitudes will be more vulnerable. For example, water ability and crop yields in southern Europe are expected to decline by 20 percent with a 2-degree increase in global temperatures. Regions where water already is scare will face serious difficulties and growing costs.

"This is our kids' future, our world's future," said Donn cq Teske, president of the Kansas Farmers Union. "Yet we are sitting here turning (climate change legislation) into a partisan bickering match."

Weak commodity

Carbon trading, however, is not anything new - especially in Kansas.

Since 2003, some farmers have traded carbon credits like hog or cattle futures on a voluntary market known as the Chicago Climate Exchange.

At present, the National Farmers Union is the largest aggregator of agriculture carbon credits, Johnson said. Thousands of farmers have signed up millions of acres nationwide, and, in Kansas, about 70 producers have enrolled 125,000 acres in the past few years. Credits were then sold to utilities and other companies that voluntarily decided to offset their greenhouse gas emissions. Purchasers in the past have included IBM and Ford Motor Co.

However, the uncertainty about how Congress will reduce greenhouse emissions has hurt the program as the market for carbon tanked in recent months.

While the House version of the cap and trade bill allows farmers to receive some credits for carbon-reducing activities already adopted, such as reduced tillage, the Senate doesn't account for retroactive credits.

Thus, buyers aren't interested in purchasing credits when they don't know if the government will honor them as part of the proposed cap and trade program.

Teske said there have been no new enrollments in the North Dakota-based NFU program.

A similar program through Farm Bureau - AgraGate Climate Credits Corp. - has stopped enrollments for now, Swaffer said. Credits still in the program are being sold directly to companies seeking offsets.

Swaffer said credits that were trading on the voluntary program for $2 in January are a dime today. In July 2008, credits were trading for almost $8 each.

"No one is quite sure if the carbon credit they enroll today will be good tomorrow if they pass the legislation," Swaffer said. "Just to administer a contract costs more than what the credits are worth."