Cap-and-Tax Bad for Farmers, Rural America

We like to say that we have the safest, most abundant, most affordable food and fiber supply in the world.  But this isn’t just a boastful expression, it is a reality.  Our farmers and ranchers are responsible for feeding folks living in our country and throughout the world.

But, cap and tax legislation threatens that safe, abundant and affordable food and fiber supply.  The agriculture industry, as we know it, will not survive under the heavy burdens of a cap and tax policy.

This week the Agriculture Subcommittee on Conservation, Credit, Energy, and Research held two important hearings to learn more about the economic impact of climate change legislation.  Despite the fact that the U.S. House of Representatives narrowly passed the Waxman-Markey climate change bill last June – a bill that I voted against—this is only the second time Members of the Agriculture Committee have had the opportunity to explore specifically the economic impact of climate change legislation on the agriculture sector.

Witnesses at the hearing included the chief economist from the U.S. Department of Agriculture as well as members of academia. They highlighted and discussed various studies that have been completed on the costs of cap and trade on the agriculture industry.

Although these studies make different assumptions or have different end results, the overwhelming conclusion from each one is that the cost to agriculture is real.  Our farmers and ranchers have much to lose and very little, if anything, to gain.

During the hearing, Dr. Joseph Glauber from USDA said, "there is no question that agriculture is an energy intensive sector… [and] agriculture will be hit by higher energy costs." Another witness, Dr. John M. Antle from Montana State University, testified that the current economic studies "have tended to under-emphasize the costs of adaptation" for farmers. Dr. Patrick Westhoff from the Food and Agricultural Policy Research Institute added that "the House-passed legislation would raise energy costs and this would translate into higher farm production expenses."

It is expected that higher energy prices and higher operating costs will decrease farm income anywhere from $5 billion to $50 billion per year. 

Dr. Glauber also testified that a cap and trade program would dramatically reduce livestock production by double digits by 2050, which is particularly alarming.  If USDA’s analysis is true then U.S. agriculture will no longer be able to provide food security for the U.S. population, which is expected to grow by 130 million Americans by 2050. 

What this all means for the American consumer is higher food costs or worse a dependency on foreign nations for our food supply.  I believe we can find alternatives to cap and trade that will not have these overwhelmingly negative effects on our farm economy.  We should be exploring these alternatives.

Meanwhile, a vote on the Senate version of a cap and tax bill is not expected until sometime next year.  This legislation seems to be just as bad if not worse than the Waxman-Markey bill.  I give credit to Oklahoma’s senior Senator, Jim Inhofe for pushing his Senate colleagues to have a deliberative debate on this issue.

My friends, the agriculture industry and rural America cannot afford the devastating economic effects of cap and tax.  We must remain alert on this issue.

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