Climate change impacts farmers’ bottom line

Last year’s climate change conference in Paris was a grand gesture, but the costs of climate change are adding up down on the farm, say some Alberta agriculture organizations.

Carbon levies come into effect next year, and groups are asking for more information and research to convince them it is a good idea.

“There could have been a lot more work done on impacts before this was announced,” said Karen Kirkwood of Alberta Chicken Producers, which has already done background work on future costs.

“Based on the energy utilization that our producers have on their farms, the cost estimate to an average producer would be $6,300 annually over and above. That is just natural gas. That does not include electricity.”

An average farm has 27,000 birds and the impact of the carbon levy has been calculated at 1.7 cents per kilogram, which cannot be passed on to the consumer.

Many broiler producers use natural gas to heat their barns, and these must be kept at a constant temperature to protect the birds.

“Last year was an incredibly warm winter, so this is a very conservative estimate on what the cost impact will be on our family farms,” she said.

A $10 million grant for farmers to initiate more energy efficiency may not be enough because the money will run out if the program is well used.

“We are already as efficient as we can be,” Kirkwood said.

“The announcement of the additional funding is certainly nice, but it is going to quickly deplete as producers start to apply for these programs.”

Specialized sectors such as the hatching egg sector are also monitoring the changes.

The combined cost of utilities such as propane, natural gas and electricity could result in about $12,000 in added costs for average farm, said Alberta Hatching Egg Producers general manager Bob Smook.

This sector produces chicks for the broiler industry, and added costs will be passed on to customers. Producers could go elsewhere if day-old chicks become too expensive, he said.

Purple gas used by farmers is exempt from the levy, but many of these operations rely on independent transporters.

“In our industries, our producers don’t haul their own birds,” he said.

“We use commercial people, and with the commercial people they are not exempt in terms of the fuel tax.”

Industries are talking to government and looking for an amiable solution. Some want a third party independent study into projected costs.

“We have a proposal that we are evaluating to take a deeper dive on this,” said Bryan Walton of the Alberta Cattle Feeders Association.

Cattle producers estimate it could cost $6 to $7 per head, but more clarification is needed, he said.

“This is all just part of a cumulative effect of costs that we are going to bear and that is going to ripple back up through the supply chain,” he said.

Hog producers have the same concerns and feel the situation is worsening as they struggle through low prices and infrastructure costs.

Aging barns need to be renovated or replaced, but producers are struggling and cannot afford more costs, said Darcy Fitzgerald, executive director of Alberta Pork.

An extra $4,600 on utility bills may be too much for some to bear.

An energy audit was done several years ago and producers did what they could with new lighting, improved insulation and ventilation.

The government has estimated it will collect about $10 billion from the levies. Alberta Beef Producers says that money should come back to the industry.

“The carbon levy costs money, and it is foolish to pretend anything else,” said Rich Smith of ABP

The group released a paper asking the government to recognize the contribution of the beef industry to the economy and the environment.

Grasslands are a recognized carbon sink so producers should be paid to maintain rangelands and prevent carbon emissions that occur when land is broken up.

Payment for ecosystem services is a benefit to society, and programs could support producers who maintain the land to protect habitat and watersheds.

“You can’t look to agriculture for major changes in environmental impacts because we have been improving quite steadily and our sustainability assessment showed that,” Smith said.

The recent Canadian roundtable on sustainable beef showed the industry’s greenhouse gas emissions have declined as it becomes more efficient.

Talks have been ongoing with government because beef producers fear the loss of competitiveness in an export dependent sector.

“Our cattle feeders have costs due to the carbon levy that Nebraska producers don’t,” he said.

“Our processing plants have costs that their American counterparts do not.”

Smith is also dubious about renewable energy investment and how much it might cost taxpayers.

“How much money is the government going to have for subsidies and how heavily is it going to subsidize?” he said.

The dairy sector has calculated $2.2 million in direct costs at the farm level for natural gas and electricity. There are 530 farms, so the average is $4,300, said Mike Slomp of Alberta Milk.

The organization has not calculated added costs such as transportation. The dairy sector spends $24 million on trucking, so there will be an added expense.

“The milk has to be transported from all of our farms to all the plants. That happens on a daily basis,” he said.

Costs for the processing sector have not yet been figured out.

A letter from Alberta Milk has been sent to Agriculture Minister Oneil Carlier and Shannon Phillips, minister responsible for climate change, but there has been no response.

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