News Update
Aug. 17, 2009

Cap-and-trade Impact on Farms Described at Greenley Center by MU FAPRI

When Lori Wilcox was asked to discuss “Cap-and-Trade Legislation Impact on Agriculture” at the University of Missouri (MU) Greenley Research Center field day, she worried about explaining the complex debates in Congress.

“The only thing worse would be to hold a town hall meeting on health care reform,” said Wilcox, program analyst from the MU Food and Agricultural Policy Research Institute (FAPRI) at Columbia, Mo.

Known as the cap-and-trade or climate-change bill, the full title of HR 2454, passed by the House of Representatives, is the “American Clean Energy and Security Act of 2009.”

The bill’s legislative goal is to create clean-energy jobs, achieve energy independence, reduce global warming, cut pollution and begin the transition to a clean-energy economy. There is much more in the 1,428-page bill, Wilcox warned.

The bill affects large industries, utility-generating plants, transportation — and agriculture. “It would be a major mistake for agriculture to not be at the table during congressional debate,” Wilcox said.

Rep. Colin Peterson, D-Minn., chair of the House Agriculture Committee, has worked with bill sponsors on 300 pages of amendments, known as the Peterson-Waxman compromise.

Those amendments allow leaving agriculture uncapped on greenhouse emissions. The U.S. Department of Agriculture (USDA) will determine which agricultural uses qualify as offsets. USDA also will gain farm and forestry credit programs. Definitions of renewable biomass were modified based on scientific review.

In current form, much of the regulation is assigned to the Environmental Protection Agency (EPA). Major parts of the plan aim to reduce carbon dioxide emissions into the air. However, carbon also will be captured from the atmosphere and sequestered (or buried) underground.

The “cap” in the name comes from efforts to limit greenhouse gas emissions to 97% of 2005 levels by 2012 and reduce emissions to 17% by 2050.

That limits emissions on mobile sources, including automobiles and heavy vehicles, as well as engines used in marine vessels, locomotives and aircraft.

The “trade” part of the name allows provisions for selling allowed emissions. This provides roles for agriculture and forestry. The Commodity Futures Trading Commission would set up markets for emission trades, just like futures trades in corn and soybeans.

There are many murky areas left undefined in the debate, Wilcox said. “Nitrogen fertilizer is currently listed by EPA as ‘presumptively eligible.’ But what does ‘presumptively’ mean?”

Also, potential revenues for carbon offsets and renewable energy are unknown. This could change rural land use and cause acreage shifts. However, the amount of shifts from agriculture into forestry is undefined. The bill contains allowances for federal assistance in rural electric generators.

MU FAPRI was asked to run its economic models to measure the financial effects. “Quantitative analysis of qualitative language is difficult,” Wilcox said. “Even the most rigorous models do not have capabilities to measure impacts over 40 years.”

In a preliminary study of Missouri crop farms, the FAPRI models projected added operating costs of $30,000 by 2050 for a 1,900-acre representative panel farm in Lafayette County. That was based on projected energy price changes from an international energy consultant. However, it did not assume fertilizer was exempt until 2025.

Considerable work remains. The U.S. Senate did not take up the bill before its August recess. When the Senate returns, Sen. Barbara Boxer, D-Calif., and the Environment and Public Works (EPW) Committee will guide the legislation. Unknown is whether EPW or the Senate Finance Committee, chaired by Sen. Max Baucus, D-Mont., will gain oversight on the money for emission allowances.

“It is a challenge to discuss the legislation without a clear view of potential costs and benefits for all sectors,” Wilcox said. “The impact on consumer food prices is unknown, but potentially large depending on crop acreage shifts.”

Support from agriculture sectors will be necessary for final approval, Wilcox said. Senate leaders have asked both FAPRI and USDA economists for additional analysis of the bill.

Final passage depends on other high-profile bills before Congress, such as health care reform. However, Wilcox expects the administration to push for passage prior to a United Nations conference in Copenhagen in December.

One thing is sure, Wilcox said: It won’t be a dull autumn for FAPRI analysts.

In addition to working with FAPRI, Wilcox operates a farm with her husband near Clarence in Shelby County, Mo.

 — Release by Duane Dailey, senior writer, MU Cooperative Media Group.

Creating the Ultimate Drought-Resistant Pasture Grass

Bluegrass hybrids ideal for pastures and for lawns could be developed faster using genetic markers developed by an Agricultural Research Service (ARS) scientist.

ARS geneticist Jason Goldman at the agency’s Southern Plains Range Research Station in Woodward, Okla., identified nine DNA primers that produce markers that can verify successful bluegrass hybrids from DNA samples. This saves time because breeders currently have to wait for the plant to mature before they can verify a hybrid by physical characteristics. The markers can be used on seedlings.

Goldman’s goal is a Kentucky bluegrass-like lawn or pasture grass that is highly tolerant to drought. The research is part of the laboratory’s program for breeding perennial cool-season forage grasses for the southern Great Plains as alternatives to wheat and other annual crops.

Texas bluegrass is native to southern Kansas, Oklahoma, western Arkansas and most of Texas. It tolerates heat and drought, but produces seed that is difficult to harvest and re-plant. It also lacks the turf quality of Kentucky bluegrass. Kentucky bluegrass is not tolerant to heat and drought, but has excellent turf characteristics and produces seed that is easy to harvest and clean.

Goldman’s goal is to combine them into one variety with a broader geographic range than Kentucky bluegrass, while retaining Kentucky bluegrass’ good qualities. The hybrid must also retain Kentucky bluegrass’ ability to produce seed that breeds true, ensuring identical progeny.

Goldman plans further tests to cross Texas bluegrass with other bluegrass species in addition to Kentucky bluegrass, and to see if the markers can be used for other purposes, such as identifying markers linked to desirable or undesirable plant traits.

This research was published in the journal Plant Breeding.

— Release by Dan Comis, ARS News Service.

Beef Class in Session

More than 35 cattle producers recently attended the checkoff-funded BEEF 706 session held at West Texas A&M University in Canyon. The two-day hands-on experience is a producer program designed to educate cattlemen about factors affecting the safety and quality of beef. This session was unique in that is was designed for feedyard managers and employees.

During the seminar producers were given the opportunity to evaluate live cattle, fabricate and evaluate carcasses. Throughout the session attendees also learned about the Choice-Select spread, grid marketing and branded beef programs.

A tour of the local Tyson harvesting facility allowed producers to gain more knowledge about the meat packing industry and instrument grading tools. The gate-to-plate look at cattle production is led by Texas AgriLife Extension meat science experts.

— Release by the Texas Beef Council.

USDA Implements Farm Storage Facility Loan Program

Agriculture Secretary Tom Vilsack today announced that changes to the Farm Storage Facility Loan (FSFL) program have been implemented in accordance with the 2008 Farm Bill, which will allow producers of eligible commodities to obtain low-interest financing to build or upgrade farm storage and handling facilities. The USDA Farm Service Agency (FSA) administers FSFL on behalf of the USDA Commodity Credit Corporation (CCC).

“President Obama and I are committed to providing the necessary resources to keep producers financially solvent before, during and after each crop year, and this program will help ensure that they have adequate capacity to store their harvest until they sell it on the open market,” Vilsack said.

The maximum principal amount of a loan through FSFL is $500,000. Participants are required to provide a down payment of 15%, with CCC providing a loan for the remaining 85% of the net cost of the eligible storage facility and permanent drying and handling equipment. Loan terms of 7, 10 or 12 years are available depending on the amount of the loan. Interest rates for each term rate may be different and are based on the rate at which CCC borrows from the Treasury Department.

Payments are available in the form of a partial disbursement and the remaining final disbursement. The partial disbursement will be available after a portion of the construction has been completed. The final fund disbursement will be made when all construction is completed. The maximum amount of the partial disbursement will be 50% of the projected and approved total loan amount.

Applications for FSFL must be submitted to the FSA county office that maintains the farm’s records. An FSFL must be approved before any site preparation or construction can begin.

The following commodities are eligible for farm storage facility loans:

• Corn, grain sorghum, rice, soybeans, oats, peanuts, wheat, barley or minor oilseeds harvested as whole grain
  
• Corn, grain sorghum, wheat, oats or barley harvested as other-than-whole grain
  
• Pulse crops - lentils, small chickpeas and dry peas
  
• Hay
  
• Renewable biomass
• Fruits (including nuts) and vegetables - cold storage facilities
  

For more information about FSFL or other FSA price support programs, please visit your FSA county office or www.fsa.usda.gov.

— Release provided by the USDA.

Web Site Offers Window to Upcoming Meetings

Click here to visit the calendar of upcoming meetings in Angus Productions Inc.’s Virtual Library.

— Compiled by Shauna Rose Hermel, editor, Angus Productions Inc.