| To start, the bill covers 85% of all greenhouse gas (GHG) emissions in the U.S. but it excludes agriculture and forestry. Therefore, farmers will not have to pay to pollute.
However, they WILL have to pay increased energy and fertilizer prices. Energy and fertilizer costs account for about 15 percent of production costs, and of course that varies among farmers. The report notes that row crop producers (corn, soy, etc) will be particularly impacted by increased energy costs. Energy costs also vary regionally. And then there's the livestock industry... They spend much less on energy (under 10 percent of total operating costs), but buy grain as feed. If grain prices go up (as they are projected to do), then livestock operations' costs go up too. That's the bad news for farmers.
The good news for farmers has to do with the sales of carbon offsets. Farmers will be able to plant forests on some of their land to earn a carbon offset, which they can then sell. That actually sounds like a good thing. Farmers will also see a boon from the sales of biofuels, which will increase commodity prices across the board. (Corn prices go up, so more people plant corn, then there is less supply of other commodities and their price goes up too.) That is not a good thing. Corn-based ethanol is not great in terms of reducing oil use or GHG emissions, and then last thing we need is for farmers to use more and more marginal lands to produce corn (or for farmers to plant corn year after year instead of rotating it with soybeans).
Because some land will be removed from production in order to plant forests for offsets, the USDA expects overall production to go down and prices to go up. This will help farmers deal with the increase in energy costs. All in all, the USDA expects net farm income to go up.
The last impact to consider is the impact on the consumer. Farmers will make out okay, but consumers will see inflation at the supermarket as their food prices go up, according to USDA projections. Of course, if this bill is effective in reducing GHGs and climate change, that's a small price to pay. |
