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Provo » The cap-and-trade bill before the U.S. Senate will put an even greater burden on the backs of farmers who already are strapped with staggering debts, Utah agricultural leaders said on Friday.
The nation's financial meltdown has weakened the beef, swine and poultry industries and pushed U.S. dairies to the brink, said Utah Farm Bureau President Leland Hogan on Friday during the midyear conference of the state's largest agricultural organization.
Milk prices are at about half of the production costs, forcing dairy producers "to farm away their equity," said Hogan at the end of a two-day session attended by 250 people.
The U.S. agricultural industry will fare even worse under the Waxman-Markey bill that would establish a cap-and-trade plan for greenhouse gases to address climate change, farm leaders say.
Although there are some provisions designed to soften the blow to agriculture, such as an exemption from the emissions cap, the concessions are not enough to offset costs in an industry that relies heavily on energy to produce food for America's dining tables, farm leaders say.
Farm Bureau CEO Randy Parker said the bill would drive up the cost of fuel for tractors, fertilizer for crops, electricity for processing and packaging and gas for delivery trucks. He points to last summer when gasoline and diesel prices hit record levels. Food costs in turn, rose by 3.5 percent to 4.5 percent
The cap-and-trade bill would not only drive up the cost of fuel, but natural gas and coal prices also would go up, Parker said. The end result would make the current hike in food prices "pale by comparison."
On June 26, the House narrowly passed the 1,000-plus-page bill in such record time that hundreds of pages were still being collated when the vote came.
"The process is an embarrassment," Parker said. "It was shameful."
Tom Tripp, an engineer and spokesman for U.S. Magnesium, said Thursday that Waxman-Markey would force more U.S. companies overseas. At the same time, undeveloped countries, such as China and India, will be allowed to continue polluting. China, for instance, uses a process to produce magnesium that emits 10 times more pollution and uses 10 times more energy.
In America, environmental restrictions are so onerous that China is now the world's largest magnesium producer, he said.
Tripp's own company was embroiled in a $1 billion lawsuit brought by the U.S. Environmental Protection Agency over hazardous waste. A Utah federal judge sided with U.S. Magnesium in 2007. The EPA is appealing.
Back in the 1980s, U.S. Magnesium's Tooele plant ranked as the nation's worst polluter. After spending tens of millions of dollars in cleanup costs, the plant no longer is among the top 100 U.S. polluters. In Utah, the plant ranks No. 4 in toxic releases.
Republicans and Democrats cite starkly different costs of the cap-and-trade program.
Rep. Ed Markey, D-Mass., points to a Congressional Budget Office report showing the bill will cost a family of four less than 50 cents a day by 2020, or about $175 a year.
But Republicans charge that an analysis by the conservative Heritage Foundation shows the CBO numbers are way off the mark. The think tank's report says a family of four could be hit with a $1,870 bill in 2020 for the program, and upward of $6,800 by 2035.
Freshman Rep. Jason Chaffetz, R-Utah, who has sponsored legislation to disclose to consumers the actual costs of the program, has repeatedly pointed to figures produced by the GOP minority of the House Energy and Commerce Committee that show the highest dollar impact.
Chaffetz says each Utahn would be hit with $1,115 in new taxes on his or her electric bill, and that Utah's average family would pay upward of $3,435 a year under the program.
-- Thomas Burr
