Agriculture squeezed by demand, climate

By Christine Stebbins - Analysis

ST. LOUIS (Reuters) - U.S. agriculture faces the daunting task of growing enough crops to meet the demands of both a hungry world and the booming new biofuels industry while reducing its impact on climate change.

That formidable challenge hung over discussions this week at a U.S. soybean industry conference that chewed over topics from biodiesel fuels to agriculture's own greenhouse gases.

Agriculture was seen by some as a boon, producing alternative fuels that can reduce the man-made emissions of greenhouse gases like carbon dioxide cited by most scientists as the prime mover in global climate change.

But others were concerned about agriculture's own contributions to climate change and agriculture as a potential target in future government policies on climate change.

Agriculture accounts for more than 10 percent of global man-made greenhouse gas emissions through fertilizers, rice and livestock production, deforestation and other land use, the Intergovernmental Panel on Climate Change (IPCC) said in 2007.

"There's tremendous pressure building in this country for some kind of plan that addresses climate change," Tom Vilsack, former governor of the top U.S. corn and soybean growing state of Iowa, told the conference.

"The next administration, whether it's John McCain or Barack Obama, either one will not do the job that needs to be done unless the president and vice president say unequivocally that the single most important domestic issue for this country to embrace over the next four years is energy and climate change," Vilsack said.

"Climate change requires agriculture reducing its environmental footprint -- that's the big point," said Jane Earley, an attorney consulting on international standards and investment in the biofuels, food and agribusiness sectors.

Such reductions will be difficult at a time demand for U.S. crops for food and fuel is soaring not just at home but abroad. The United States exports 54 percent of the world's corn, 36 percent of its soybeans and 23 percent of its wheat, along with vast amounts of beef, pork, poultry and dairy products.

PRICING CARBON

But U.S. agriculture seems focused on the likelihood of carbon caps and carbon trade in the next U.S. administration.

Carbon trading starts with set government limits on allowable emissions of greenhouse gases, starting with carbon dioxide, the most prevalent global warming pollutant.

Energy-intensive industries that overshoot their allowable emissions buy unused allowances from those meeting targets -- essentially forcing companies to buy permissions to pollute.

Such a "cap-and-trade" plan began in Europe in 2005, while Canada is set to launch its own market in 2010. But the Bush Administration has rejected such a system for the United States, the world's biggest emitter of man-made greenhouse gases.

"Because there has not been a national policy, states have taken it upon themselves to begin action," Vilsack said.