The Legislative View
Editor’s Note: In these difficult economic times, it would be easy to overlook some key pieces of legislation that could impact the ways ag retailers do business during 2009. CropLife magazine asked three trade associations to tell us what issues they will be working on during the upcoming year.
by Susan Helmick, CropLife America
As we prepare for an Obama administration and a new Congress in 2009, we at CropLife America (CLA) are optimistic that we have built the foundation for a good working relationship with the incoming administration. We look forward to the opportunities to further the dialogue we began during the campaign season by working on areas of mutual agreement, and by establishing a working relationship of trust and transparency that will help us as we navigate key legislative and regulatory issues impacting our industry during the next four years. For U.S. agriculture, having key leaders in both major political parties coming together to advance solid policy solutions for growers and their agribusiness partners is essential to positively shaping the future of American agriculture.
Change in our industry continues apace largely because of the crop protection industry’s regulation by and cooperation with government agencies such as EPA, USDA, and others. Recent consultations between EPA and the National Marine Fisheries Services indicate a need for improvements in data sharing and coordination to better communicate and more quickly resolve issues related to assessing the impacts of pesticides. Listed species will be better protected, and taxpayers will benefit from a synchronized process that eliminates duplicative procedures and speeds results. No doubt, issues surrounding the Endangered Species Act will be on the environmental agenda of the 111th Congress and will remain a top CLA priority.
Legislative efforts to enhance security at chemical facilities will indeed be on the Congressional agenda next year as the authority over this matter sunsets in mid-2009. We continue to work closely with Congressional oversight committees to ensure that the special needs of agriculture are taken information consideration as part of any legislative package.
Ratifying the Stockholm Convention on Persistent Organic Pollutants (POPs) is also a priority, as the rest of the world continues to take actions that ultimately affect both basic manufacturers in the U.S. and foreign manufacturers as well. CropLife America supports the U.S. becoming a party to the convention through ratification, which would require Congress to pass POPs implementing amendments to the Toxic Substances Control Act and the Federal Insecticide, Fungicide and Rodenticide Act, accordingly. Congress has indicated that the necessary statutory reforms are a priority, and we look forward to working closely with policy makers on this effort.
The Needs Of Energy
by Kathy Mathers, The Fertilizer Institute
Here at The Fertilizer Institute (TFI), there are several issues for 2009. Despite having experienced the largest operating price increases in history from 2000 to 2007, U.S. crop growers’ cost of doing business will continue to increase significantly in the future as a result of rising energy prices and potential new climate change regulations, according to a study conducted recently by Doane Advisory Services. The study, which analyzed the energy price impacts of Senate bill S. 2191, “America’s Climate Security Act ” (Lieberman-Warner) on eight major U.S. crops, indicates that the legislation will add $6 billion to $12 billion to total crop production costs, leading to a significant decline in farm income. While this climate change legislation died in the last session of Congress, the Doane study provides a legitimate overview of the potential negative consequences of legislation that is likely to be considered in the next session of Congress.
In the baseline scenario of the study, Doane assumes no new regulation of climate change emissions and applies forecasts of natural gas prices from the Energy Information Administration of the Department of Energy and crude oil price forecasts reported by USDA. Alternative scenarios in the study are based on the energy price impacts estimated in three scenarios of EPA’s recent analysis of S. 2191, the Lieberman-Warner Climate Security Act of 2008.
The Doane study indicates that cap and trade legislation could further exacerbate the problem of rising production costs for U.S. growers. Due to increasing energy prices, operating costs for corn are forecast to rise by an additional $60.14 per acre by 2020. Potential climate change legislation could add an additional $40.33 to $78.80 in operating costs per acre of corn, resulting in a total increase of more than $100 per acre by 2020. As a share of total production costs, results for the other crops considered are equally significant.
Some growers may have an opportunity to receive payments for sequestering carbon if they use specific farming practices. According to the Chicago Climate Exchange (CCE), growers in 17 states could potentially receive a credit of 0.6 metric tons of carbon/acre/year for using no-till. Specified rates in the remaining states are either lower than 0.6 metric tons or are currently not available from CCE.
At an assumed future carbon price of $30 per metric ton, which is well within the range of prices being proposed as likely by climate change modelers, growers could potentially receive $18 per acre for sequestering carbon. However, this is well below the projected crop production cost increases resulting directly from S. 2191 for corn and significantly below the total increase in corn production costs of $100.47 to $138.94 projected in 2020. Consequently, potential cap and trade legislation would place a severe burden on U.S. crop growers by driving operating rates even higher for growers who are already experiencing the highest production costs on record and will result in a significant decline in farm income.
by Bonnie McCarvel, Mid America CropLife Association
Water issues are one of the focus areas for Mid America CropLife Association (MACA). In the region, there are three main issues.
The first issue is the Great Lakes — Superior, Michigan, Huron, Erie, and Ontario — and their connecting channels, which form the largest fresh surface water system on Earth. They cover more than 94,000 square miles and drain more than twice as much land, and they hold an estimated 6 quadrillion gallons of water, about one-fifth of the world’s fresh surface water supply and nine-tenths of the U.S. supply. The treaty between Canada and the U.S., signed in 1987, to address toxic substances is being reviewed with the goal to have the chemical list completed by June 2009. The precautionary principle is in play with use of “persistent releases” while Region V EPA is pushing for more restrictive limits on chemicals. There is pressure to ban or sunset chemicals and the control vs. eliminate debate is ongoing.
The second item is the Federal Water Quality Coalition. MACA is a member of the Coalition — which is a group of industrial companies, municipalities, agricultural parties, and trade associations — whose goal is to ensure that water quality programs under the Clean Water Act are focused, flexible, and founded on sound science. The specific issues they will be working on in the year ahead include: Total Maximum Daily Load, Nutrient Management, Endangered Species Act, Mercury, and Allowable Frequency.
Reporting To States
The third issue is the tracking and reporting of the regulations and legislation by the states within the MACA region. It appears that some of the states are becoming more active in their regulation of chemicals and are not necessarily leaving the matters to be determined by the federal government. This can place more of a burden on entities that do business in various states as they try to comply with a potential patchwork of rules and regulations.