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Securing U.S. Agricultural Competitiveness by Stopping Deforestation: New Report Shows How Protecting Forests Abroad Will Keep Ag State Economies Strong

Sasha Lyutse

Posted May 26, 2010 in Living Sustainably, Saving Wildlife and Wild Places

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Earlier today, the National Farmers Union (NFU) and Avoided Deforestation Partners (ADP) released a report linking the protection of tropical rainforests to stronger U.S. competitiveness in global agricultural and timber markets. Titled Farms Here, Forests There; Tropical Deforestation and U.S. Competitiveness in Agriculture and Timber, the report details how illegal and unsustainable overseas agriculture and logging operations are rapidly deforesting the world’s rainforests, flooding the market with cheap commodities, and driving down commodity prices, thereby costing American farmers, ranchers and timber producers hundreds of billions of dollars.

The report does three important things:

First, it highlights how tropical deforestation has historically hurt American farmers, ranchers and foresters and estimates the revenue losses American agricultural and forestry commodity producers will suffer over the next 20 years if deforestation continues unchecked (my colleague discusses this here). Second, the report details how dedicated funds and incentives for investing in protecting tropical forests in U.S. climate and clean energy legislation will directly benefit U.S. agricultural and timber producers, as discussed here. Finally, it breaks down these revenue gains by U.S. state, showing how global efforts to protect tropical forests will give a big boost to our farm state economies and local rural communities.

So how does deforestation in Brazil and Indonesia affect soybean farmers in Iowa and cattle ranchers in Texas?  In many countries, timber, farming, and ranching operations clear tropical forests, usually through  the destructive practice known as “slash and burn”, without having to pay for the enormous loss of carbon associated with such practices. This has given foreign producers what amounts to a subsidy in cheap land and timber that allows them to undercut U.S. producers in global markets. More than 300 million acres have been deforested worldwide since 1997–land cleared for timber, cattle, and other agricultural commodities like soybeans and palm oil, which the NFU-ADP report examines. These commodities compete directly with products from farms in states like Iowa, Illinois, Minnesota and Indiana, cattle ranches in states like Texas, Kansas and Oklahoma, and timber operations in states like Pennsylvania, Tennessee and Florida, significantly impacting farm state competitiveness in these global markets.

How big a difference can stopping deforestation make to U.S. farm state economies?  To take one example, deforestation has enabled such as swell in South American soybean production that, according to the USDA, the increased supply has put downward pressure on U.S. soybean production (see here and here). For top soybean producing states like Indiana, this translates into major revenue losses. Soybeans are Indiana’s second largest agricultural commodity and, according to USDA, represent nearly 25% of the state’s total farm receipts and 8.4% of U.S. soybean production by value as of 2008. Indiana also ranks 4th in the U.S. in soybean exports, with 2008 export revenues of nearly $1.6 billion. The NFU-ADP report estimates that stopping tropical deforestation would bring cumulative revenue gains of $2.7-$4.2 billion for Indiana soybean farmers from 2012-2030, dollars the state would lose if deforestation is allowed to continue unchecked. For states like Missouri and Ohio, soybeans represent the top state agricultural export, with annual export values of over $1 billion each. According to the report, stopping deforestation would bring both states additional soybean revenues equal to roughly 2-3 times this amount over the period 2012-2030.

This table provides a great summary snapshot of the revenue gains other soybean-producing states in the South and Midwest could see if deforestation is stopped by 2030:

 Table 1.bmpThe USDA estimates that over 60% of deforestation in Brazil is attributable to cattle ranching. According to the report, stopping deforestation would boost total revenues for the top 5 beef-producing states by $25.5-$31.6 billion from 2012-2030:

 table 2.bmp

The report tells a similar story when it comes to the potential revenue increases top U.S. oilseed and timber-producing states could see from a strong global effort to conserve tropical forests:

table 3.bmp 

table 4.bmp

 

The benefits are clear, but do we have the tools to end deforestation and keep farm state economies strong?  Yes, key provisions in a comprehensive climate and clean energy bill would create significant financial incentives to protect tropical forests and level the playing field for American farmers, ranchers, and foresters. These policies, coupled with international cooperation, would help to quickly slow and stop deforestation by 2030. If these goals are met, tropical forests will be valued for their environmental benefits and kept intact, and the land will not be used to produce artificially cheap agricultural commodities that undercut producers in states like Iowa, Illinois, Texas and Pennsylvania. These state economies and rural communities depend on strong markets for U.S. agricultural and forestry exports.

Unfortunately, as my colleague discussed here, while the Senate bill includes most of the key tools to aid the world in addressing global warming, it lacks adequate funding to reduce deforestation. The Senate bill must be strengthened by adding key incentives for public and private sector investment in tropical forests.  By valuing tropical forests for the carbon they store and cracking down on illegal logging, this investment will not only address a major source of global warming pollution but help secure markets for U.S. farm exports, paying dividends for America’s farm state economies. 

 

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