Prospects for House passage of climate change legislation improved when House Agriculture Committee Chairman Collin Peterson announced his support of the American Clean Energy and Security Act of 2009.

Still, produce industry leaders are worried the bill would to more harm than good to fruit and vegetable growers.

Peterson said changes to the bill after negotiations with House Energy and Commerce Committee Chairman Henry Waxman, D-Calif., include an agriculture offset program that will be run by the U.S. Department of Agriculture. The program will allow growers, ranchers and forestland owners to take part in a “market-based carbon offset program,” he said.

The bill is expected to be voted on by the full House by June 27 or June 28, said Kam Quarles, vice president of government relations and legislative affairs for Washington, D.C.-based United Fresh Produce Association.

Produce industry lobbyists said the prospect of an offset program that would reward growers for carbon saving practices might not provide much benefit.

“Because of our production practices, we’re not able to do no-till like the corn or wheat guys might be able to do, and we’re certainly not running methane digesters like the dairy industry is capable of doing,” Quarles said.

For example, cover cropping is a good way to reduce emission, but that interferes with drip irrigation.

“The equation for us is likely significantly increased input costs and little ability to mitigate those costs,” Quarles said.

As of June 24, he said United Fresh had not taken a position on the base climate change bill or the deal struck by Peterson and Waxman.

On June 22, Tom Nassif, president of Western Growers, Irvine, Calif. and Cathy Enright, vice president of federal government affairs for Western Growers, visited with Waxman and Rep. Dennis Cardoza, D-Calif., to discuss the bill.

Enright said any carbon offset program under USDA management would provide growers with a better opportunity to offset the increased costs of inputs of fuel, oil, fertilizer and chemicals.

“I think Chairman Peterson did a really good job of responding to agriculture’s desire to have an offsets program managed by USDA,” she said.

However, she said it is still uncertain how specialty crop growers would be able to participate in an offset program, even if the program is managed by USDA.

For example, she said specialty crops account for just 3.2% of the area of U.S. farmland, and companies seeking carbon offsets may want to deal with large growers of wheat and other crops.

“If you are Exxon, you want to buy credits from one wheat farmer, you don’t want to buy your credits not from 49 different vineyards,” she said.

The value of carbon credits — and whether their value is sufficient to spur changes in production practices — is also a question, she said.

Enright said agriculture wants to help reduce greenhouse gas but also remain competitive while doing that.

Standard input costs of fuel, fertilizer/chemicals and electricity account for 40% of input costs. Western Growers said one estimate suggests the cost of fuel would rise 65% under the climate change bill.

Kathy Means, vice president of government relations and public relations for the Produce Marketing Association, Newark, Del., said agriculture hasn’t been given enough consideration under the bill.

“I think there has been a cursory look at agriculture, both in the benefits agriculture can bring to climate change and also the inputs they use,” Means said.

Peterson hopeful

In his press conference, Peterson said lawmakers were wrestling with how to allow growers who won’t be able to participate in the offset program because of production practices — producers of fruits and vegetables, rice and possible cotton and peanuts — have some kind of allowance for higher costs.

Peterson told said that although there is an agreement that USDA will create rulemaking for the offset program, the Environmental Protection Agency may play an oversight role.

“The problem is that EPA doesn’t trust agriculture and agriculture doesn’t trust EPA,” he said.

Peterson said lawmakers plant to send a letter to the White House seeking guidance on how to help define EPA’s role.

He said the agreement with Waxman addresses concerns about international indirect land use provisions that unfairly restricted U.S. biofuels producers. Peterson said there will be a five-year study about the effect of biofuel production on climate change issues. At the end of that five-year period, he said the USDA, EPA and the Department of Energy must sign off on any conclusions. In addition, Peterson said Congress will be given one year after that time to intervene if lawmakers don’t agree with decision of the three agencies.

The legislation exempts agriculture and forestry from the definition of a “capped sector.” Under the bill, greenhouse gas emissions from regulated entities will be capped beginning in 2012. Peterson said agriculture won’t be regulated under the bill. He predicted a majority of the Democrats on the House Agriculture Committee would support the bill.

House Agriculture Committee Ranking Member Frank Lucas, R-Okla., released statement June 24 that the Waxman-Peterson agreement doesn’t fix the legislation.

“We are still looking at the most dramatic tax increase of all time and the agriculture community will be hit the hardest,” he said.

Republican opposition is expected and many farm groups have expressed opposition to the bill.

Washington, D.C.-based American Farm Bureau Federation regulatory specialist Paul Schlegel said June 24 that the group supports Peterson’s efforts but is opposed to the bill. Meanwhile, the Senate is expected to begin work on climate change legislation in July.