Agriculture Secretary Tom Vilsack has ordered his staff to revise a computerized forecasting model that showed that climate legislation supported by President Obama would make planting trees more lucrative than producing food.
The latest Agriculture Department economic impact study of the climate bill, which passed the House this summer, found that farmers would profit in the long haul from the legislation. But those profits would come mostly from higher prices for their crops caused by the legislation's incentives to plant more forests and thus reduce the amount of land devoted to food-producing agriculture.
According to the economic model used by the department and the Environmental Protection Agency, the legislation would incentivize landowners to convert up to 59 million acres of farmland into forest over the next 40 years. The reason: trees clean the air of heat-trapping gasses better than farming.
Mr. Vilsack, in a little-noticed statement issued with the new report last week, said that the department's forecasts "have caused considerable concern" among farmers and ranchers.
"If landowners plant trees to the extent the model suggests, this would be disruptive to agriculture in some regions of the country," he added.
He said that the so-called FASOM model, which was created by researchers at Texas A&M University, does not take into account other provisions in the House-passed bill, which would boost farmer income while they continue to produce food. Those omissions, he said, overestimate the potential for increased forest planting. Mr. Vilsack said he has directed his chief economist to work with EPA to "undertake a review of the assumptions in the FASOM model, to update the model and to develop options on how best to avoid unintended consequences for agriculture that might result from climate change legislation."
The legislation would give free emissions credits, known as offsets, to farmers and landowners to plant forests and adopt low-carbon farm and ranching practices. Farmers and ranchers could sell the credits to big emitters of greenhouse gases to comply with the legislation--a provision included in the bill to help offset expected higher fuel and fertilizer costs.
But the economic forecast predicts that nearly 80 percent of the offsets would be claimed through the planting of trees, mostly in the Midwest, the South and the Plains States.
The American Farm Bureau Federation and some farm-state Republican lawmakers have complained that the offsets program would push landowners to plant trees and terminate their leases with farmers, hurting the farmers' ability to make money.
The model also projects that reduced farm production will cause food prices to rise by 4.5 percent by 2050 compared to a scenario in which no legislation is passed, the department found.
A department spokesman declined to comment about how quickly the review would take place or if Mr. Vilsack would revise the department's economic impact projections.
The Senate has yet to act on climate legislation although one committee, the Senate Environment and Public Works Committee, passed legislation similar to the House's last month. That measure did not include agriculture provisions.
Senate Agriculture Committee Chairman Blanche Lincoln, an Arkansas Democrat, has said she will hold hearings on climate provisions but has not indicated when those will take place.
The ranking Republican on the committee, Sen. Saxby Chambliss of Georgia, and his counterpart on the House Agriculture Committee, ranking Republican Rep. Frank Lucas of Oklahoma, wrote to Mr. Vilsack and EPA Administrator Lisa Jackson last week to ask for new economic analyses of the House and Senate bills.
"EPA's analysis was often cited during debate in the House of Representatives and the study had a great impact on the final vote. If there was a flaw in the analysis, then it would be prudent to correct the model and perform a more current and complete analysis on both (bills)," they wrote.
In a statement, EPA said: "EPA looks forward to working with USDA and the designer of this particular computer model to continue improving the analytical tools that all of (us) use to predict the ways that different climate policies would affect agriculture."
Allison Specht, an economist at the American Farm Bureau Federation, said that the results of the EPA and Agriculture Department analysis have been largely confirmed by other studies.
"That's one of the realities of cap-and-trade legislation. The biggest bang for your buck for carbon credits is planting trees," she said.