By Jacob Bunge
A White House goal to slash U.S. greenhouse-gas emissions hinges
in part on farmers and agriculture companies changing the way they
manage fields and feedlots. The farm sector says it will need the
government's help to make it happen.
The Biden administration effort outlined in April has drawn
support from agribusiness giants including Tyson Foods Inc., JBS
SA, Cargill Inc. and CF Industries Holdings Inc., which have been
pursuing their own environmental commitments. Individual farmers,
whose participation is critical to meeting the administration's
goals, are weighing the potential costs and benefits to their
bottom lines, and say government support will be needed.
Near Loyal, Okla., farmer Clay Pope for years has followed some
of the carbon-reduction practices being promoted by the Biden
administration, including keeping vegetation on his fields even
when his usual crops, such as wheat, aren't growing. While his
harvests have increased, he said, so have his costs.
"It's not cheap," Mr. Pope said.
President Biden has called for cutting U.S. greenhouse-gas
emissions by 50% to 52% by 2030, compared with the baseline year of
2005. He said farmers could help achieve the goal -- and benefit
from it. In his speech Wednesday before Congress, Mr. Biden said
farmers could be paid for planting cover crops that remove more
carbon from the atmosphere.
The farm sector produces about 10% of U.S. greenhouse-gas
emissions, with fertilizer application and livestock operations
representing top sources, according to the Environmental Protection
Agency.
Some U.S. Department of Agriculture programs can help reduce
farms' greenhouse-gas emissions, according to the agency, including
incentives to plant trees, reduce soil erosion and curb overuse of
fertilizer. The USDA in April increased payments and added new
incentives under its Conservation Reserve Program, which the agency
said can mitigate climate change.
Big agricultural companies, responding to consumer and investor
pressure, have made voluntary commitments to cut emissions.
Executives said they are using more renewable power, funding
climate-friendly farming and overhauling parts of their operations,
such as wastewater lagoons and fertilizer-production plants. They
said the efforts put the Farm Belt in position to help the Biden
administration achieve its target.
"The importance of having that goal out there cannot be
discounted, so everybody is working toward the same thing," said
John R. Tyson, chief sustainability officer for Tyson Foods, the
biggest U.S. meat company by sales.
With often-thin profit margins, individual farmers have tended
to be wary of regulations that add costs and complexity to their
operations. Concern about tighter environmental rules was one
reason some farmers said they backed Donald Trump in the 2016 and
2020 presidential elections.
Farmers generally support emissions-reduction efforts but need
more specifics on the Biden administration's strategy, said Andrew
Walmsley, director of congressional relations at the American Farm
Bureau Federation, a trade group for farmers.
"We don't have a plan to react to," Mr. Walmsley said. "It
causes concern, and allows rumors to fly."
The USDA has been seeking input from farmer and food groups on
potential new programs, and the process of developing those remains
in early stages, an agency spokesman said.
Heidi Heitkamp, a former Democratic U.S. senator from North
Dakota, said farmers' resistance toward emissions-mitigation
measures had eased over the past five years. "American agriculture
is now saying, 'OK, what's in it for us?' " said Ms. Heitkamp, now
agriculture director for tax-services firm Alliantgroup LP.
The U.S. government in 2020 paid out a record $46 billion in
direct payments to farmers, to ease the impact of economic
disruption caused by the Covid-19 pandemic and trade disputes. Some
agriculture executives said the industry's sustainability
investments may need a further hand from the government.
Suburban Chicago fertilizer giant CF Industries is investing in
systems that reduce its plants' emissions of nitrous oxide, roughly
300 times more potent than carbon dioxide. CF Chief Executive Tony
Will said the Biden administration needed to consider
carbon-related fees or taxes on imported goods to ensure that
overseas rivals that aren't taking similar environmental steps
can't sell cheaper agricultural products into the U.S.,
undercutting efforts like CF's.
"We are talking about sizable investments in order to accomplish
what he wants to do," said Mr. Will, whose company has targeted
net-zero carbon emissions by 2050.
The Office of the U.S. Trade Representative is considering trade
tools like border-adjustment taxes to achieve the Biden
administration's goal, an agency spokesman said.
In Oklahoma, Mr. Pope said that battles with soil erosion led
him to stop tilling his fields two decades ago. Minimizing tillage
is one practice that the USDA has highlighted as a way farmers can
curb greenhouse-gas emissions, since tilling soil releases carbon
into the atmosphere. Mr. Pope also began growing cover crops like
clover and cowpeas on his fields, between seasons for traditional
moneymakers like wheat.
Those practices have enriched his soil, reduced herbicide
spraying and eventually cut his annual fertilizer bill roughly in
half, he said, noting that the last few wheat crops have been among
his best ever.
Adopting those practices also meant Mr. Pope has had to buy more
seed, and initially he spent around $200,000 on new equipment. His
bottom line is benefiting now, but without assistance from USDA
programs, Mr. Pope said it would have been hard to justify the
upfront investment.
"Everyone wants to go green to help the environment, but cash is
green too," Mr. Pope said.
Write to Jacob Bunge at jacob.bunge@wsj.com
(END) Dow Jones Newswires
May 01, 2021 05:44 ET (09:44 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
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