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US Agriculture Secretary upbeat about climate legislation impact.

- Friday, July 24, 2009

US Climate change legislation could deliver a net $US 1 billion increase in annual revenue for US farmers by 2015, increasing to $20 billion a year by 2050, according to recent testimony by US Agriculture Secretary Tom Vilsack to the US Senate Agriculture Committee.


The Agriculture Secretary was one of a number of senior US government officials providing testimony to the US Senate Agriculture committee in its deliberations about the US Climate Change legislation that will soon be debated by the Senate.


Vilsack provided the following estimate of the likely impacts of the legislation on a wheat producer.


A Northern Plains wheat producer, for example, might see an increase of $.80 per acre in costs of production by 2020 due to higher fuel prices. Based on a soil carbon sequestration rate of 0.4 tons per acre and a carbon price of $16 per ton, a producer could mitigate those expenses by adopting no-till practices and earning $6.40 per acre. So, this wheat farmer does better under the House passed climate legislation than without it. And, it’s quite possible that this wheat farmer could do even better if technologies and markets progress in such a way that allows for the sale of wheat straw to make cellulosic ethanol.

The complete USDA analysis can be accessed here.

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