Ag Secretary talks with All Ag, All Day

U.S. Secretary of Agriculture Tom Vilsack spoke with All Ag, All Day on Monday afternoon about the Obama Administration's proposed Climate Change legislation. Vilsack said he believes the analysis demonstrates the economic opportunity for farmers and ranchers can significantly outpace for climate legislation. In the short-term he said, the economic benefits will likely outweigh the costs and in the long-term they will easily trump the cost based upon the offset market set up in the measure approved by the House. Vilsack noted that producers should share in about $1 billion in net income over the first few years after implementation, with the potential of $20-$50 billion over "the course of time".

The Chicago Climate Exchange hosts a trading platform for carbon credits today, where credits are sold on a voluntary basis. One year ago the credits were trading in the neighborhood of $3.40 per ton, whereas today the market has dropped to under 30-cents per ton. When asked if USDA used this information in their calculations, Vilsack responded that it was not taken into consideration because it was not part of a national or international effort and was instead part of a voluntary effort. He also said that a realistic price for credits would be $15 to $16 per ton based upon a nationwide cap and trade system. With this being a mandatory system, a one billion tons of domestic offsets by law, the opportunities for agriculture are huge.

Vilsack also said at stake was more than the climate. Without the U.S. taking a lead in the climate change arena, international trade would be in jeopardy too, he said. He concluded by reminding those who oppose the legislation to remember the opportunity that will exist for rural communities to prosper under the plan.