Carbon Policy Specialists Study Impact Of Global Warming Policy On Farming


Changes in agriculture can be expected, according to Dr. Lanier Nalley (left) and Mike Popp, who spoke about their studies on the issue of global warming.


Photo by John LaRose, Jr.


BETTY VALLE GEGG-NAEGER MidAmerica Farmer Grower


theory, according to Dr. Lanier Nalley and Mike Popp, who spoke recently about their studies on the issue. Nalley, Assistant Professor, and Popp, Professor, both of the University of Arkansas Agri- cultural Economics depart- ment, said the changes could be significant. “With the new admin- istration, it doesn’t matter if you believe in global


C STUTTGART, ARK.


hanges in agriculture can be ex- pected, regardless of whether or not farmers accept the global warming


warming or not, some sort of carbon pol- icy will be adopted,” Nalley said. “It may not be this year, maybe not next, but it’s coming down the line.” Popp continued: “What that means is


changes to agriculture and farmers are going to have to react,” he said. “What we’re hoping to do is provide some policy advice so we can say ‘if you put this policy in place, the likely impact will be.’ Hopefully, we would be able to say ‘this policy would be better than the other one.’” Nalley began the discussion by describing what a carbon foot-


print is and the process to measure it. He discussed sequestration and various tillage practices and soil types, then combined the two to get a net emis- sions number. From that number, he gave


various


analyses of hypo- thetical carbon prices and what that would mean in terms of potential offset pro- grams


for


farmers. A price range of 40 cents per ton to $90 per ton


has been ana- lyzed.


“We considered, that if we were to get


such a revenue, what the incremental in- come effect for producers would be if they were to sell those carbon offsets,” Popp said. “It’s generally positive but not very large, as payments to producers only flow if changes in net carbon emissions are positive for the environment. What has not been included in the analysis is that potentially both commodity and fertilizer and fuel prices would rise with an uncer- tain outcome. “If you model only fertilizer price in-


creases you’re looking at decreases in net returns for crop production in the state of Arkansas,” Popp continued. “However, a lot of those numbers are subject to our interpretation of how a policy scenario might unfold. Even a small change in some numbers on the carbon sequestra- tion side over various other measures could really impact things.” For example, a change in price for rice


to five-year average levels also has the po- tential to reduce net state farm income compared to the study’s base scenario - 2007 crop prices and 2007 input pro- duction costs. So a lot of these numbers suggest that a carbon policy can have im- pacts and can have potentially large im- pacts, so they’re not very easy to analyze. “Emissions, as opposed to soil carbon


sequestration, are fairly easy to analyze,” Nalley said. “We don’t know how the fed- eral government is going to use tillage and soil type and above and below ground biomass, or there’s talk of them just using a tillage factor. If that’s the case, then our results are going to be vastly different than what the federal government estimates. So the sequestration is where the variation in results is going to be.” There are many variables, and


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Nalley said that with the Wax- man Markey bill agriculture stands to benefit because it’s not under the cap and trade scenario. “But you also have to consider


Also available 31’ $3,900 41’ $6,800 21,000 GVW


that if the Waxman Markey bill goes through, petroleum pro- cessing facilities and electric coops will see increased costs and they probably will be passed down to the farmer,” Nalley said. “Although they do have offset potentials, they also have the potential to seek higher input prices.” Still other variables enter the


$4,200


scenario. All the processing in- dustries would also be affected.


“If you have large shifts in crop


production across different crops, if there’s ground water re- strictions or the ground water availability in the Delta is low- ered, you could potentially see fairly large acreage shifts, and as a result, attendant effects in the processing industry. So change in agriculture is the name of the game in the forseeable future – possibly significant changes,” Nalley summed.


∆ BETTY 8• MidAmerica Farmer Grower / August 6, 2010 VALLE GEGG-


NAEGER: Senior Staff Writer, MidAmerica Farmer Grower


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