Sunday, December 13, 2009

Department of "Ya Think?"...

I suppose we need an academic paper even now to make the stunningly obvious acceptable data for policy decisions, but this one seems a waste of computer time.
The EPA’s proposal for offsetting the increased release of carbon into the atmosphere is to plant specific kinds of trees on land now used for corn production. Hayes equated the production of trees to a cash rent equivalent by multiplying the average annual sequestration amount in tons by $30. In the Cornbelt, the production of white or red pine trees instead of corn would represent $103 to $133 if the land were converted to forest or $93 to $123 if pasture were converted to forest. He says because of the wide diversity in cash rental rates around the Cornbelt, there would be a large range of desire by land owners to enroll land into the program. Those with poor land would participate and those with higher quality land would not. Hayes used cash rental data at Iowa State and applied it to the Cornbelt. At a rate of $110 per acre he says that suggests 20% of the Cornbelt or 22.5 million acres would be converted to trees, and at a rate of $118 per acre, 25% of the crop land would be converted.
Using the FAPRI computer model to calculate land owner reaction as far in the future as 2023, Hayes says at that time the price of corn will be 28% more than currently, and soybeans will be 20% more. With those commodity prices, 10 million acres of pasture and CRP would be converted to cropland, reducing the amount of land available for the carbon sequestration to 40 million acres.
In addition to creating a computer-based projection, Hayes asked about 250 farmers for their verification of his expectations. He said about half of those were livestock producers and were opposed to the concept because it would result in higher feed costs, and the other half were crop producers, but were also opposed, which surprised Hayes. But their opposition was based on not wanting to setaside part of their operation into another conservation program. Nearly all rented land owned by someone else and did not want to lose the chance to profit from crop production. Hayes says they believed that such a program would raise rental rates and there would be a big difference between an ethanol-based program to increase corn production or a climate change-based program that would provide benefits only to those who own cropland.
Hayes expects that agribusinesses would prefer to see the land remain in crop production because of the opportunity to sell more farm equipment and crop inputs. And he expects those living in rural areas, but not farming, would think in the same vein. But he says to make everyone happy, the climate change program would have to limit conversion of cropland for the carbon offset, and confine it to land that is already pasture, trees, or CRP. That would mean other methods of carbon sequestration would have to be used, such as burying crop residues. [More][My emphasis]

So, to sum up, it would appear that farmers like me don't want to lose rented acres and significant amounts of income to a government land retirement program just like we hate it when somebody else outbids us.

Nope, nope, couldn't see that coming.

1 comment:

Jim D. said...

From 2005 to 2008, I worked for a fertilizer dealer in southern Iowa, about 40 miles SE of Des Moines. As a company, we covered territory all the way down to the Missouri border. The two tiers of counties along the Missouri border were very hilly and had light soils; mainly good for pasture and hay. A lot of it was in the CRP and was used for nothing. There was some resentment of the CRP in the area; locals did not like the fact that it was out of production, and often blamed the CRP for the loss of rural jobs, the desertion of rural towns, and for the general lack of economic activity in the area. I'm pretty sure any program that attempts to take 20% of active farmland out of production won't even make it off the drawing board.