Relief from the high energy-related costs that have sucked money out of farmers' already profitless bank accounts over the past year isn't likely to come soon, Secretary of Agriculture Ann Veneman said during a visit to the Mid-South.
But long-term, she said, agriculture can play an important role in the solution to the nation's energy problems — and farmers can add some dollars to their bottom lines in the process by producing crops and biomass that can be used for powering machinery and generating electricity.
Farmers will also increasingly reap the benefits of new technologies, Veneman said at the 66th annual meeting of the Delta Council at Cleveland, Miss. She made similar comments at stops at Agricenter International, Memphis, and at the Dale Bumpers National Rice Research Center at Stuttgart, Ark.
With energy problems “looming large,” she said, “questions of how best to use our natural resources are taking center stage.”
“I know how damaging energy shortages and price spikes are to farmers and the whole rural infrastructure. The cycle of energy interruptions can add up to big costs for the farmer and the processor.
“In the Delta, the crops you produce have a high energy demand in fertilizer, irrigation, pesticides, drying, ginning, etc. Availability of energy-based inputs, when needed and at a reasonable price, can spell the difference between profit and loss.
“Farmers, unlike hotels or airlines, can't add an energy surcharge to the price of their production. Instead, the nature of their markets forces them to absorb additional costs like those from the past year's run-up in natural gas, diesel, and propane prices.”
At her Memphis and Stuttgart stops, many farmers agreed with Veneman's assessment of the impact of high energy costs on their operations, but said if crop prices don't improve and if the new farm bill doesn't provide a reasonable safety net for agriculture, a lot of farmers may be forced out of business.
The need is great for some type of short-term relief from the high energy prices, they said.
Veneman said the national energy strategy recently proposed by President Bush is “based on a series of common sense recommendations aimed at improving energy conservation, while increasing the nation's supply of energy and the capacity to move it from where it's produced to where it's consumed, without creating supply shortfalls and transportation bottlenecks that can cause blackouts and price spikes.”
Natural gas, a key component of nitrogen fertilizer production and for heating poultry facilities, “is a key area in which the U.S. has the capacity to substantially increase production,” Veneman said, citing “promising natural gas resources” in the Rocky Mountain region, the Gulf of Mexico, and Alaska. She said the U.S. Forest Service is “considering operations” to explore and develop natural gas on federal forest lands.
The “good news” in all the gloom of the current energy picture, Veneman said, is that “the energy challenges we face offer tremendous opportunities for agriculture.”
Farmers, she said, “can help to solve our energy problems through the production of domestic liquid fuels such as ethanol, biodiesel, and biomass for electricity generation. Renewable energy is good for farmers and good for the environment.”
But, Veneman noted, a drawback thus far has been that renewable energy has been more costly to produce than conventional energy.
The president's plan, she said, addresses this issue in two ways: (1) through expanded research on renewable fuels to make them more economically feasible and extension of ethanol tax credits through 2007, and (2) federal tax credits for electricity produced by wind, agricultural biomass, poultry litter, etc.
“We hope this will kick-start a much broader development of biomass, including the use of crops such as grasses or short rotation trees, or eventually agricultural residues such as corn stover and rice straw for firing electric power generation.”
As these technologies improve and become increasingly competitive, Veneman said, “new cropping opportunities for farmers will emerge, providing them with new income sources and providing the country with new sources of environmentally-friendly energy.”
The potential for bio-energy is “only one example” of how agricultural technology and research can help contribute to a healthy environment, while improving farming productivity and efficiency, she said.
Currently, U.S. forest and farm lands are offsetting an estimated 15 percent of the overall greenhouse gas emissions, she said. “Specific actions, like conservation tillage, no-till cropping, winter cover crops, planting trees, and growing bio-energy crops to offset fossil fuels, can also help to offset these emissions — benefiting not just farmers, but the entire country.”
The Delta Council is composed of agricultural, business, and government leaders from 18 counties in the Mississippi Delta and surrounding part-Delta counties.