Johanns Says Farmers Deserve Answers on Costs of Cap and Trade

Senator Mike Johanns today called for a Senate Agriculture Committee hearing to discuss the cost of cap-and-trade legislation for American farmers and ranchers. Johanns' request came after U.S. Agriculture Secretary Tom Vilsack testified before the Senate Environment and Public Works Committee on the subject and provided no information about or estimate of the bill's impact on input costs for agricultural producers.

"Nebraska farmers and ranchers, along with those across the country, are rightly concerned about how the House cap and trade bill will impact them," Johanns said. "Secretary Vilsack should provide the Senate and America's farmers with an answer to one simple question: How much more does the Department of Agriculture estimate America's agricultural producers will pay under the House bill? The Administration has wholeheartedly endorsed the House bill, while farm group after farm group has opposed the legislation. I'm mystified at how the Secretary can serve his primary mission of supporting U.S. agriculture if he does not know the impact of the bill he supports on the very producers he has taken an oath to serve."

Senator Johanns wrote a letter today (below) to Senator Tom Harkin (D-IA), Chairman of the Senate Agriculture Committee, and Senator Saxby Chambliss, (R-GA), ranking Republican on the committee. The letter requests that the committee investigate and analyze the economic impact of cap-and-trade legislation on American farmers and ranchers.

Fast Facts On Cap-and-trade legislation:
• According to a study published by The Fertilizer Institute on previous cap-and-trade proposals, the legislation would add between $6-12 billion to total farm production costs.
o An increase in production costs of corn is estimated to be between $40-78 per acre by 2020.
o Production costs of soybeans are estimated to increase by $11-20 per acre in the same time period.
o Production costs of wheat are estimated to increase by $16-32 per acre in the same time period.
• Numerous agricultural associations are opposed to the House-passed bill. Click here for a list.

Below is the full text of the letter sent July 7, 2009 to Chairman Harkin and Ranking Member Chambliss:

July 7, 2009

The Honorable Tom Harkin
Senate Committee on Agriculture, Nutrition and Forestry
Washington, D.C. 20510

The Honorable Saxby Chambliss
Ranking Member
Senate Committee on Agriculture, Nutrition and Forestry
Washington, D.C. 20510

Dear Chairman Harkin and Ranking Member Chambliss:

As you know, the House recently passed H.R. 2454, the Waxman-Markey cap-and-trade bill, without the benefit of USDA estimates of the cost impact on America's farmers and ranchers. It would be a serious and grave error for the Senate to consider any related bill under the same circumstances.

I write today to ask you to help the Senate avoid such a reckless approach. Leadership of the Environment and Public Works Committee has indicated that the House-passed bill will serve as the base text for its consideration. I note also that the Obama Administration has clearly indicated its unmitigated support for the House bill. I therefore ask you to schedule as soon as possible a hearing and ask USDA to present its own estimate of the costs America's producers will pay under the House bill.

At a minimum, such an estimate should include estimates of diesel fuel, gasoline, and natural gas price changes, electricity price changes, the bill's effect on fertilizer production, cost, and consumption, as well as estimates of the impact of increased transportation costs on commodity markets.

In addition, I urge you to invite various groups associated with agricultural production to present their findings.

As you know, part of USDA's mission is to promote and support American agriculture. Under the current circumstances, fulfilling this mission requires, at a minimum, an analysis of the cost impacts of legislation specifically designed to discourage the use of and make more expensive the very energy depended upon by our nation's producers. I look forward to working with you and USDA to ensure American agricultural producers are provided complete information about the costs they will face if this legislation passes.


Mike Johanns
U.S. Senator