State farmers losing money from energy policy uncertainty
By Robert Pore, The Grand Island Independent
While Congress is fighting attempts by the U.S. Environmental Protection Agency to regulate greenhouse emissions and lawmakers' inability to pass comprehensive energy legislation to address climate change, farmers are losing money because of that uncertainty, according to John Hansen, president of the Nebraska Farmers Union.
Nebraska Farmers Union released information last week from the Chicago Climate Exchange (CCX) comparing the value of agriculture-based carbon payments based on today's carbon values of 15 cents per metric ton compared to the 2008 average annual CCX price of $4.72 per metric ton.
Hansen said it is important for farmers, ranchers and elected officials to better understand the amount of dollars being lost due to climate change uncertainty.
Hansen said it is important for farmers, ranchers and elected officials to better understand the amount of dollars being lost due to climate change uncertainty.
Nebraska's 3,064,918 acres enrolled in the Chicago Climate Exchange's voluntary carbon sequestration practices by 1,604 farmers and ranchers totaling 3,937,232 metric tons is ranked first in the nation.
According to Hansen, the Chicago Climate Exchanges estimated the market value difference between the current 15 cents per ton compared to the 2008 marketing year average price of $4.72 per metric ton a loss of $17,993,150 in earned income for Nebraska farmers and ranchers. He said the national loss of farm income for the 8,700 farmers who have enrolled 17.2 million acres sequestering 32.4 million metric tons totaled $148,100,091.
According to Hansen, the Chicago Climate Exchanges estimated the market value difference between the current 15 cents per ton compared to the 2008 marketing year average price of $4.72 per metric ton a loss of $17,993,150 in earned income for Nebraska farmers and ranchers. He said the national loss of farm income for the 8,700 farmers who have enrolled 17.2 million acres sequestering 32.4 million metric tons totaled $148,100,091.
Hansen said Nebraska Farmers Union, one of the three largest aggregators of carbon in the state, divided the number of Nebraska carbon sequestration participants into the lost state carbon market value to get a "ballpark" average loss of $11,217.67. The same process for national data yielded an average loss of $17,022.99 per national enrollee.
He said that in a year of higher production costs, a reduced federal farm income safety net, and struggling grain and livestock commodity prices, that amount of lost income is significant.
"These market-based carbon sequestration payments go to farmers and ranchers who sequester carbon by utilizing good conservation practices, which also improve water quality, air quality, reduce fossil fuel use, and improve the water holding and fertility of the soil," he said.
Hansen said the majority of the reports and analysis done comparing the additional costs to the new revenue streams from a regulatory system designed to reduce carbon emissions similar to HR 2454 passed by the House show that agriculture comes out far ahead compared to allowing Environmental Protection Agency regulation of greenhouse gases, as is now proceeding.
The University of Tennessee study conducted for the 25 x 25 organization estimated the net returns to agriculture and forestry to be $13 billion, slightly smaller than the value of the national soybean crop, according to Hansen.
"The climate policy uncertainty caused by the failure of Congress to effectively deal with carbon emissions is turning a win-win opportunity gain into a lose-lose for all forms of farmer-produced renewable energy, national energy independence, rural economic development, green jobs creation, the environment, wind energy development, and the economy as a whole," he said. "It is time to put partisan politics aside, and in the interest of our children and generations to come, move our nation forward."
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