F U T U R E G E N BA C K E R S celebrated when the U.S. Department of Energy issued an official decision on the project. ..............2
ILLINOIS WIND ENERGY will pump nearly $2 billion into the state’s economy from existing wind farms and more are coming. .........3
FEDERAL LEGISLATION will cover many transportation issues and could negatively impact some ag exemptions. ......................4
Monday, July 20, 2009
Two sections Volume 37, No. 29
FAPRI pegs higher ag costs to climate bill Stallman: House climate plan a ‘fools errand’? BY MARTIN ROSS FarmWeek House climate policy proposals are “not the answer” for farmers, consumers, or, for that matter, the world, American Farm Bureau Federation (AFBF) President Bob Stallman last week told senators preparing to debate emissions “capand-trade” legislation. AFBF executive public policy director Mark Maslyn warned the consequences of the House plan “are enormous not just for agriculture but for the country.” A new report by Missouribased Food and Agricultural Policy Research Institute (FAPRI) estimates the House bill would cost the average Missouri farmer an added $11,000 a year by 2020 and more than $30,000 by 2050. Given the pace of climate debate, Maslyn was concerned that “few members of Congress really know what is in this bill” and hoped ag interests could help the Senate “do a little better.” Stallman told Senate Environment/Public Works Com-
mittee members House measures would be ineffective “if we really want to change what the world’s climate will be in 40 or 100 years.” Unless China, India, and other countries adopt similar greenhouse emissions restrictions, the U.S. would be “embarking on a fool’s errand at great cost to our economy and our children and grandchildren.” Missouri production costs
FarmWeekNow.com To learn more about the potential impacts of climate change legislation on Midwest farmers, go to FarmWeekNow.com.
would increase by 8.1 percent for corn, 4.4 percent for soybeans, and 10.4 percent for wheat if the bill became law, FAPRI stated. Study co-author Pat Westhoff pegged higher costs to oil and natural gas expenses related to proposed caps on greenhouse gas emissions, and said the cost increases likely would be similar across the Midwest.
As input costs increase, growers could adjust input usage and the mix of crops produced, with implications for yields, production, and prices, according to FAPRI. And that, Westhoff told FarmWeek, could impact future farm investment. But he stressed the bottom line ultimately will depend on the extent to which Congress allows producers to market emissions “offsets” generated through conservation, forestry, and other emissions reduction/sequestration strategies. “Anything that affects profitability of crop production is going to have an effect on the value of land, both to sell and to rent,” Westhoff said. “If the whole story was the increase in cost we’re reporting here (in the FAPRI study), that would tend to put a downward pressure on land prices and rental rates. “But we haven’t looked at the other side of the ledger. What happens with the ability to sell offsets? What happens if there’s a big enough change in crop prices? Those may actually offset some or potentially even all of the impacts we’re seeing here. “To make an extreme case, suppose we had large shifts of
American Farm Bureau Federation President Bob Stallman, right, testifies before U.S. Senate Environment and Public Works Committee members considering House “cap and trade” proposals. Stallman, flanked by Environmental Defense Fund President Fred Krupp, told lawmakers the bill “will have virtually no impact on the earth’s temperature in the year 2050,” but would pose “enormous economic consequences for our country and the agricultural sector.” (Photo courtesy of the American Farm Bureau Federation)
land into forestry? That would make farmland more valuable than it is today.” But while some groups, including the National Association of Wheat Growers, support the House plan, Stallman told lawmakers fruit and vegetable growers unlike row-crop farmers “aren’t going to have any real opportunity to participate in the offset markets.” According to The Fertilizer Institute’s Estelle Grasset, the
Waxman-Markey bill could encourage widespread “fuel switching” — replacement of coal or other higher-emissions energy sources with natural gas, an important nitrogen fertilizer feedstock. Meanwhile, the bill’s ag provisions encourage movement from commercial fertilizer to use of manure, a move that may conflict with some more prescriptive farm “best management” practices, Grasset said.
State budget complete, now come cuts Periodicals: Time Valued
BY KAY SHIPMAN FarmWeek
The spending cuts will begin in state government now that the General Assembly passed and Gov. Pat Quinn signed a state budget. However, the budget appropriates funding in a lump sum instead of through line items and allows the Quinn administration to determine spending levels and cuts, said Bart Bittner, Illinois Farm
Bureau associate director of state legislation. “The Illinois budget is cut to the quick and requires Illinois government to borrow from its employee’s pension plan to provide a balanced budget,” Bittner said. During floor debate on the vote, many lawmakers said they supported the budget changes to avoid shutting down state government. “This budget was put together in a very unconventional way and will require extensive review to surface all the implications,” Bittner added.
FarmWeek on the web: FarmWeekNow.com
The General Assembly passed legislation allowing the state to borrow against the state’s pension system. The bill generates a total of $3.46 billion in short-term bond funds. Of that funding, $2.23 billion will be dedicated to human service programs and services and the remaining $1.23 billion will be spent at the governor’s discretion, according to Bittner. The budget implementation bill, which also passed, sets out many provisions by which state government will operate. Some of the key points are: • Up to $1.1 billion dollars
may be held in reserve from any and all state agencies at the governor’s direction; • There will be no cost-ofliving increases and 12 unpaid days for state lawmakers; • Per-student funding level for education is $6,119; • Designated funds will be swept from nearly all segments of state government; and • Emergency rules to implement the budget may be adopted with approval from the legislative Joint Committee on Administrative Rule. Bittner emphasized that See Cuts, page 3
Illinois Farm Bureau®on the web: www.ilfb.org