Letter to Dr. Joseph Glauber, Chief Economist, United States Department of Agriculture

COCHRAN JOINS CALL FOR MORE USDA DATA ON HOW CLIMATE CHANGE BILL COULD AFFECT AGRICULTURE

Agriculture Committee Members Request Briefing on Impact of House Climate Change Bill

U.S. Senator Thad Cochran (R-Miss.) has joined a number of fellow Senators in requesting more analytical information from the U.S. Department of Agriculture on the impact a House-passed climate change bill could have on agriculture production.

Cochran serves on the Senate Agriculture Committee that last week conducted a hearing on climate change legislation. The hearing prompted Cochran, Committee Chairman Saxby Chambliss and other committee members to request a briefing on the USDA's initial analysis of agricultural impacts in the 1,428-page cap-and-trade bill (HR.2454) passed by the House of Representatives.

"The climate change issue, and legislation addressing it, is complex. We should take time to carefully consider how our policy decisions could affect agriculture production and, ultimately, the economy and job creation," Cochran said. "Before the Senate moves forward, I want more information on how this legislation could affect an important sector of our Mississippi economy."

The request for a briefing was issued in a letter to Dr. Joseph Glauber, USDA Chief Economist. The letter seeks updates on the UDSA's "Preliminary Analysis of the Effects of HR.2454 on Agriculture," which is based on estimates provided by the Environmental Protection Agency.

"We believe it would be helpful for you to brief the Committee on the results of the EPA analysis with particular attention to price impacts on various crops and sectors, acreage adjustments, allowances to the fertilizer industry and the relative benefits that accrue between agriculture soils, afforestation, and methane and nitrous oxide reductions," the Senators' letter to Glauber said.

Authored by Chambliss, the letter was signed by Cochran and Senators John Cornyn (R-Texas), Chuck Grassley (R-Iowa), Mike Johanns (R-Neb.), Richard Lugar (R-Ind.), Mitch McConnell (R-Ky.), Pat Roberts (R-Kan.), and John Thune (R-S.D.).

The USDA preliminary report notes that, "Fuel, oil and electricity expenses are estimated to rise, on average, 22 percent above baseline levels in the long term while fertilizer and lime expenses are estimated to rise, on average, by almost 20 percent… As a result, net farm income is estimated to decline by as much as 7.2 percent from baseline levels."

In their letter to Glauber, the Senators also recommended that USDA, in its ongoing analysis of climate change legislation, rely on a wide range of data, estimates and models beyond those provided by the EPA.

The following is the text of the correspondence sent to Glauber:

Dr. Joseph Glauber
Chief Economist
United States Department of Agriculture
Washington, D.C. 20250-3800

Dear Dr. Glauber:

With release of the Department's "Preliminary Analysis of the Effects of H.R. 2454 on U.S. Agriculture" and Secretary Vilsack's testimony in front of the Senate Committee on Agriculture, certain questions came to light that we believe require further attention.

We believe that the study is a first step in understanding the vast impacts of H.R. 2454 on production agriculture. As noted yesterday by Secretary Vilsack, a cap-and-trade and offset regime has many complex variables that require rigorous study. In the question and answer session, certain issues arose that we believe must be part of the continuing analysis of H.R. 2454.

First, rather than rely on energy estimates and other assumptions from the Environmental Protection Agency (EPA), we believe it is more appropriate for the Department to utilize a range of estimates. As you know, the results of an economic analysis are often shaped and largely dependent on the assumptions and independent variables used in the model.

In addition, during the hearing, there was some confusion regarding the long-term impacts and benefits of H.R. 2454. We believe it would be helpful for you to brief the Committee on the results of the EPA analysis with particular attention to price impacts on various crops and sectors, acreage adjustments, allowances to the fertilizer industry and the relative benefits that accrue between agriculture soils, afforestation, and methane and nitrous oxide reductions. This briefing would facilitate our understanding of the costs and benefits of H.R. 2454.

We look forward to working with you in the weeks and months ahead as the Senate begins its debate on climate change legislation.

Thank you for your prompt attention to this request.

Very truly yours,

U.S. Senator Saxby Chambliss (R-Ga.)
U.S. Senator Thad Cochran (R-Miss.)
U.S. Senator John Cornyn (R-Texas)
U.S. Senator Chuck Grassley (R-Iowa)
U.S. Senator Mike Johanns (R-Neb.)
U.S. Senator Richard Lugar (R-Ind.)
U.S. Senator Mitch McConnell (R-Ky.)
U.S. Senator Pat Roberts (R-Kan.)
U.S. Senator John Thune (R-S.D.)