Vilsack: climate legislation a boon to farmers

By Jim Snyder - 12/02/09 11:31 AM ET

Agriculture Secretary Tom Vilsack offered a full-throated defense of climate legislation in a morning conference call with reporters.

“Bottom line: we think this is a net benefit for farmers and ranchers,” Vilsack said. How big? Vilsack said net farm income could increase by $20 billion under the bill.

The secretary and former two-term Iowa governor was previewing the results of a U.S.D.A. study on climate legislation passed in the House. The department’s chief economist, Joseph Glauber, was set to explain the results of the analysis in greater detail during a House Agriculture Committee this morning.

The big benefit for farmers comes in the opportunity to sell so-called “offsets” in the market created by cap-and-trade legislation. Companies can reduce their emissions at the smokestack or they can invest in projects that remove carbon from the air or prevent its release outside its own facilities, which are known as offsets.

Climate friendly farm practices like no-till farming that reduce the disturbance to carbon-absorbing soils or the addition of equipment to capture methane emissions could qualify. Vilsack said over the long-term the study shows a potential windfall for farmers, even though operating costs could increase. The study also found that the bill's affect on food prices would be "extraordinarily small," Vilsack said.

The issue of how the legislation plays down on the farm is critical to the bill’s future, because several swing votes in the Senate represent rural states.

Groups like the American Farm Bureau Federation are among the biggest critics of climate legislation. The farm bureau believes a cap and trade bill will raise energy costs and hurt farmers and ranchers compete in the global marketplace.

Vilsack acknowledged the legislation would affect different types of producers differently. But he said there would be a cost of inaction as well. Energy costs, for example, would likely continue to grow if the U.S. continues to rely on foreign sources of energy.