USDA Study on Cap & Trade Bill Is an Incomplete Analysis

Recently, the U.S. Department of Agriculture released a preliminary analysis of the effects H.R. 2454, the cap and trade legislation, will have on the livelihoods of our farmers and ranchers.

This is a simple, but not very revealing study.  It does not present a complete and realistic analysis of all the costs associated with growing food and fiber.  Our farmers and ranchers deserve a better accounting of the costs associated with a cap and trade scheme than what USDA produced today.  Members of the House Agriculture Committee, of which I am Ranking Member, have been waiting for this study for two months and it is still inadequate.

The fundamentals of the study are based upon EPA’s flawed assumptions of how much energy prices will increase.  Even with those generous assumptions, the study still projects petroleum prices will increase by 15% natural gas and electricity will increase by more than 30%. Our farmers and ranchers understand the devastating impact of higher energy costs of this magnitude on their operations.  That is why 120 agriculture groups are opposed to this national energy tax still today.

The analysis omits whole sectors of agriculture like fruits and vegetables from consideration.  The analysis provides no accounting for costs up and down the production process such as transportation and processing.  There is no accounting for the potential of soil sequestration in agriculture soil.  It provides no explanation for how an offsets program would work in practice.  And, by USDA’s own admission does not account for the costs associated with producers participating in an offsets program.  And there is no analysis of how food costs will increase for consumers.

The bottom line is we still need more information.  This analysis was effective in producing more questions than answers about a bill that will invariably change for the worse the economic landscape of our nation forever.