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Corn+Soybean Digest

Will Farmers See Benefits From Cap and Trade?

target="_new">USDA continues to contend that farmers will see big net benefits from the cap-and-trade climate change bill, according to Doane's. However, on closer analysis, most of the benefits come from planting trees on crop and pasture land to earn carbon offsets to sell to industry.

According to USDA's analysis, about 27 million acres are planted to trees when the carbon price is $27/ton, which could happen by 2013. By 2050, the carbon price is estimated at $70/ton, resulting in an additional 60 million acres planted to trees. USDA says that about 35 million of those acres will come from cropland, with the rest coming from pasture. The USDA analysis also shows big declines in livestock production as a result of the cap-and-trade legislation.

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