NCGA opposes House cap and trade bill

The National Corn Growers Association Corn Board has decided to oppose H.R. 2454, The American Clean Energy and Security Act. That is the cap and trade bill that passed the House in 2009.

NCGA said increased costs to farmers and impacts on food and energy security are behind the decision. The cost estimates were revealed after a recent analysis (.pdf) of the legislation’s economic impacts on corn growers and other sectors of American agriculture.

NCGA said it still remains neutral on cap and trade as a policy issue and will continue to work with Senate staff to craft legislation that benefits agriculture.

In a news release, Darrin Ihnen, president of NCGA and a farmer from South Dakota, said:

Since the passage of this bill by the U.S. House of Representatives in June 2009, the National Corn Growers Association has maintained a neutral position on the legislation pending further review. Although our neutrality has often put us at odds with the majority of other mainstream agricultural groups, we believe it was critical to remain engaged with lawmakers while the economic impacts were analyzed, and last year NCGA retained Informa Economics of Memphis, Tenn., to study the potential impacts on agriculture.

Now, based on the recently completed economic analysis, NCGA has no choice but to oppose H.R. 2454. The results of the Informa study indicates that every corn grower in the country will experience increased costs of production resulting from H.R. 2454. In the early years of this legislation, these higher production costs will be relatively minor. However, over time these prices will significantly increase, placing an unnecessary burden on growers.

Ihnen also ntoed that while the legislation offers opportunities to produce carbon offsets, the study shows that not all growers will be able to participate, and those unable to adopt continuous no-till production will experience serious economic hardship resulting from H.R. 2454. This would be most true for farmers in the northern Corn Belt.

Concerns were also raised about diverting productive farmland into newly planted forests or perennial grasses solely to gain offset credits.