Cost versus benefit to ag of cap and trade

Farm and Ranch July 9, 2009 Agriculture Secretary Tom Vilsack acknowledges that a cap and trade system Congress is working on would increase input costs for agricultural producers.

Vilsack: “Because anytime you price carbon you are basically putting a burden on fertilizer and fuel which is a very significant part of crop production in this country.”

But Vilsack says because provision will be made for carbon offsets he is confident farmers and ranchers will come out ahead.

Vilsack: “And they will be purchasing those credits, those offsets, from farmers and ranchers. And the income from those credits being sold, in my view at the end of the day, are going to exceed the cost that might be associated with this bill. So that it is a net gain for farm and ranch families across the country.”

Although the National Association of Wheat Growers supported the House bill on climate change its CEO Daren Coppock isn’t ready to say the benefits to producers will outweigh the costs.

Coppock: “No I can’t say that. There may be some cases where that is the case. All I can confidently say at this point is that the net cost to the producer will be less under the package of changes that were negotiated by Chairman Peterson in the House than they would be if the EPA were to out on their own.”

Secretary Vilsack says the USDA is in the process of doing an economic evaluation of the impact on rural America. Coppock says everyone is anxiously awaiting that study so there will be a little more data around the discussion.

I’m Bob Hoff and that’s the Northwest Farm and Ranch Report on the Northwest Ag Information Network.

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