THE proposed US cap-and-trade Climate Bill could increase the input costs of a typical Midwestern farm by tens of thousands of dollars annually, according to an analysis by the highly respected Food and Agricultural Policy Research Institute.
And it will have different consequences for different agricultural areas and industries, former US Ag Secretary Mike Johanns (R-Neb) warns.
Johanns says the US Department of Agriculture (USDA) knows that cap-and-trade will increase agriculture production costs, but that it asserts the opportunities will outweigh these costs.
The Senator, however, says he hopes this assessment is based on sound economic analysis and not just rhetoric, so he's asked for a lot more information on the American Clean Energy and Security Act of 2009, now before the Senate.
Like Australia's proposed climate bill, the US bill will be based on an emissions trading scheme (ETS), but is more favourable to farmers than is Australia's proposed bill.
Johanns and Senate Ag Committee Ranking Member Saxby Chamblis (R-Ga) have asked US Secretary of Agriculture Tom Vilsack to come with an analysis of the cost to agricultural producers, with a breakdown of cap-and-trade costs, with the analysis organised by commodity and by state.
Chambliss has sent similar letters to Environmental Protection Agency Administrator Lisa Jackson and USDA chief economist Dr Joseph Glauber, requesting an economic analysis of the legislation. He says understanding the costs producers, consumers and others will bear as a result of the proposed legislation is very important as the Senate takes up the legislation.
The next Senate hearing is next Wednesday.
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