Fueling Global Prosperity: Worldwide Gains for Farmers Are in Reach

Watch Jake Caldwell Discuss the 2007 Farm Bill (YouTube)

What if we could combat global warming, eliminate unfair trade barriers, and reduce global poverty with policies that could (simultaneously) lessen our country’s dependence on fossil fuels and lift the fortunes of farmers around the world? If that sounds too good to be true, it’s not.

In fact, the 110 Congress could vote key components of this multi-faceted strategy into law this year. Congress only needs to act.

Today, Secretary of Agriculture Michael Johanns testifies before the Senate Agriculture, Nutrition, and Forestry Committee on the administration’s plan for the 2007 Farm Bill. The administration’s proposal is a modest first step, particularly in boosting biofuels research and reducing subsidies to the wealthiest corporate farm entities. But Congress must accept that there is much more work to be done.

The 2007 Farm Bill, which will come up for a vote later this year, will require the 110th Congress to make critical decisions on energy legislation and trade policy. The timing is right for Congress to seize this opportunity to make the investments needed to jumpstart and sustain a global agricultural economy driven by clean renewable energy, technological innovation, and fair and open markets at home and abroad.

The 2007 Farm Bill offers the United States a strategic opportunity to improve the competitiveness of our nation’s farmers. Unlike the Bush administration, the Center for American Progress is putting forward a proposal that moves agriculture, energy, and trade forward together in unison and better prepares our rural communities and the nation for the future by expanding our farm policy to more farmers. Our policy proposals promote clean, renewable energy grown in a sustainable manner, and open new markets overseas for U.S. products.

Rising global demand for oil, alongside concerns regarding the costs and consequences of global warming, are contributing fresh momentum to enlisting agriculture as a partner in diversifying global sources of energy and promoting innovation. Farm-based renewable energy, and biofuels in particular, may offer a way forward.

The United States must take action to spur production of cheap, clean, renewable energy—a need that grows more urgent by the day. The United States’ share of imported oil has risen to 66 percent this year from 58 percent in 2000, deepening our energy dependence on foreign sources of oil and unstable Middle East regimes. At the same time, worldwide addiction to fossil fuels has caused severe economic dislocation and aggravated climate change.

No wonder so many governments and savvy Wall Street investors are stepping up their search for renewable energy produced in a sustainable manner. Compared to gasoline, traditional ethanol—made primarily from corn feedstock in the United States—arrives at our pumps from the Midwest, not the Middle East, and makes modest reductions in greenhouse gas emissions that contribute to global warming.

But growing corn and converting it to fuel is still an energy-intensive process with widespread consequences for our land and our environment. We can do better.

We must move rapidly and deliberately toward the commercial development of the next generation of advanced cellulosic biofuels derived from dedicated energy crops (including wild prairie grasses such as switchgrass) grown in a sustainable manner, alongside bulk plant matter such as corn stalks, wheat straw, and rice hulls.

According to a recent study by the University of Tennessee, such advanced biofuels could supply 25 percent of U.S. petroleum needs by 2025, while pumping $700 billion into the economy. They could provide a significant boost to our rural economies as well, raising farm income by $180 billion.

In addition, regular petroleum-based gasoline blended with ethanol reduces greenhouse gas emissions by up to 13 percent; studies indicate cellulosic biofuels produced from switchgrass, miscanthus, and other sources can make significantly greater greenhouse gas reductions. A recent University of Minnesota study concluded that perennial grasses can absorb 4.4 metric tons of greenhouse gases (14 times what they produce) after a decade of growth.

Market forces alone will not bring about this bonanza. In the absence of forward thinking progressive policies, they can even make some situations worse. As natural gas prices have risen, for example, some ethanol producers are building coal-burning plants, which will increase, rather than reduce, greenhouse gases and air pollution.

It is essential that we provide incentives to biofuel producers for efforts to maximize greenhouse gas reduction methods, conserve water and land resources, and grow energy crops in a sustainable manner. Any consideration of utilizing land currently enrolled in conservation programs for biofuels production must ensure that the primary conservation goals of the programs are not compromised.

Congress must not consider the various components of a far-reaching farm and energy policy in isolation. Unlike the Bush administration, members of Congress need to see the connections between seemingly disparate issues such as global poverty, climate change, and self-defeating trade policies on the international stage. It’s a fact, for example, that the poorest countries, which are the most dependent on agriculture, are also the most likely to suffer the ravages of drought, storms, and floods—all exacerbated by global warming.

Developing countries are also hit harder by rising energy prices. At the same time, wealthy country tariffs and subsidies deprive developing countries of a market for their agricultural products, leaving many poor farmers unable to compete in the global market.

Congress should use the 2007 Farm Bill to expand the modern safety net to serve more U.S. farmers and reinvest commodity-based subsidies into green payments, which would encourage producers to grow dedicated energy crops such as switchgrass, miscanthus, and fast-growing trees in a sustainable manner. Diversifying into energy crops will improve agricultural prices by slowing the oversupply of traditional agricultural commodities on global markets.

Better prices for corn, soybeans, and wheat, such as U.S. farmers are currently experiencing, translate into more income for farmers from a greater number of revenue sources. Indeed, rising prices might even result in more nutritious food making its way to our dinner tables.

At the same time, we must ensure that a rapid ramp up in corn prices and price volatility does not lead to irreversible damage to the land and our conservation practices.

Improved commodity prices will allow the United States, Europe, and Japan to meet the request of developing countries to improve their commitments to agricultural subsidy and tariff reform, thereby opening one avenue for progress in the WTO Doha Round of multilateral trade negotiations.

International trade challenges to our farm policies, such as Canada’s recent complaint regarding our subsidies to corn growers and the ongoing cotton subsidy dispute with Brazil, will be defused. A competitive global market in biofuels, with the U.S. leading the way and many developing countries also in position to reap the gains, will have an opportunity to succeed. All Congress needs to do is act.

The establishment of farmer cooperative and locally-owned biorefineries and biofuel facilities must also be a priority of U.S. farm policy. As current biofuel production capacity expands rapidly, the private sector and government must redouble their efforts to expand market demand for biofuels, including putting cleaner fuels such as E85 in our fuel pumps and cleaner cars such as Flex-Fuel Vehicles, or FFVs, on the road.

With agriculture, energy, and trade bills all coming up for consideration this year, Congress has an historic opportunity to demonstrate leadership and strengthen our commitment to rural communities. We at the Center for American Progress strongly urge the private and public sector to act together now to strengthen our commitment to the next generation of advanced cellulosic biofuels, bolster long-term demand with cleaner fuels and cleaner cars, and encourage greater investment in the research, development, and commercialization of new biofuel and biobased technologies.

Biofuels are not a panacea. They will never meet all of our diverse energy needs. Much work remains to be done to increase energy crop yields and decrease production and transportation costs. But if linked in combination with cleaner cars, better fuel economy, improved public transportation, and more muscular conservation efforts, the impact of farm-based renewable energy will be profound.

At the very least, widespread use of advanced biofuels holds forth the promise of slowing the devastating impacts of climate change, bringing a boost to U.S. farmers and rural communities, and breathing new life into the economies of the world’s poorest countries. How can the United States afford not to take the lead in making this grand vision a reality?

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Contact Jake Caldwell for additional information and comments:

For TV, Sean Gibbons, Director of Media Strategy
202.682.1611 or sgibbons@americanprogress.org

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202.741.6268 or tlecompte@americanprogress.org

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202.741.6273 or tkincaid@americanprogress.org