As inflation remains stubbornly high, farmers throughout the Western world are warning that cost increases from the net zero movement will drive food prices still higher while simultaneously putting many smaller farmers out of business.
Overall, prices have surged by nearly 18 percent since January 2021, when President Joe Biden took office.
U.S. consumers are struggling in an economy in which, by official statistics, nearly one-fifth of the value of their dollars has evaporated in three years—although many will say the cost of food and other essentials has become more expensive than what the official numbers state.
“Food prices are expected to continue to decelerate in 2024,” the USDA stated.
While some predict that the worst is behind us, analysts of the U.S. farming industry say there is another round of price inflation in the works, which will come from the Biden administration’s “whole of government” effort to reduce global temperatures.
The report, titled “Net-Zero Climate-Control Policies Will Fail the Farm,” projects that farmers will see costs rise by at least 34 percent, which will increase the household grocery bill for a U.S. family of four by more than $1,300 per year.
“Complying with net-zero emissions policies and corporate ESG reporting requirements will increase prices of farm inputs, the costs of which will ultimately be passed onto consumers at grocery stores and restaurants,” the report reads.
Rea Hederman, executive director of the Buckeye Institute’s economic research center, told The Epoch Times, “This is where the left is going, trying to get to net zero.”
The costs imposed on farmers are in addition to price hikes from inflation, weather, or other factors that typically affect food prices.
“The fact that the federal government printed too much money, this is on top of that,” Mr. Hederman said, “and it’s a sustained increase, not a temporary fluctuation in food prices, because you’re building higher baseline operating costs that are going to be permanent for farmers going forward.”
The report analyzed an average U.S. farm, which is about 700 acres in size, producing corn. It then summed the costs of complying with net zero mandates, as well as price increases on fuel, fertilizer, and other supplies from the various net zero initiatives that are either in place or expected to take effect.
The report projects that the cost base of this farm will escalate to $257,000 from $192,000 as a result. As costs trickle down to consumers, the grocery bill for a family of four would increase to $9,650 from $8,320—a 15 percent increase.
“It’s important for people to understand that when you’re raising costs to farmers, that is being passed on to consumers of food, and some types of food are going to be impacted more,” Mr. Hederman said. “So, for example, beef is going to go up more than oranges because if you’re raising the cost of corn, that’s an input to beef, so beef suffers a double whammy.”
Cattle ranchers are struggling not only with higher feed and fuel costs but also with drought in many parts of the United States, which has reduced herd size.
Beef a Luxury
Climate activists often oppose animal farming for this reason, and within that category, beef is the No. 1 target. Of all livestock, beef produces the most greenhouse gas emissions and accounts for about 60 percent of all greenhouse gas emissions from farming, studies suggest.
“It will be a bit like champagne, namely a luxury product,” he said. “The beef cattle will be a luxury product that we eat when we need to pamper ourselves.”
Many farmers have argued that, while larger corporate farms may be able to weather the additional pricing pressure, net zero policies will be particularly harmful to smaller farms, which will concentrate food production among an ever smaller number of producers.
“Everybody needs food to survive, so farms can pass on a great deal of that cost,” Mr. Hederman said. “But our belief is that family farms, smaller farms, a lot of them will sell out or go out of business because they do not have as much access to capital.”
Farming, with its use of heavy equipment for planting, harvesting, and transportation, is a capital-intensive business. It also requires large amounts of working capital to finance the period between planting crops or raising animals and when produce or livestock can be sold to market.
This has raised concerns that because of the environmental, social, and governance movement (ESG), which has taken hold among many Wall Street financial institutions, banks will start to penalize farms that fail to comply with ESG criteria, including reducing emissions.
The banks are all members of the U.N. Net-Zero Banking Alliance, which commits members to achieve U.N. net zero goals throughout their loan portfolios.
While these commitments are confirmed on bank websites, a JPMorgan spokesperson told The Epoch Times that “JPMorgan Chase does not have an agriculture emissions intensity reduction target” and that “we make our own banking, lending, and underwriting decisions and don’t relinquish decision-making to third parties.”
UN Paris Accords Set the Terms
In 2016, the Obama administration signed the United States up to the U.N. Paris Climate Accords.The agreement commits the United States to cutting its greenhouse gas emissions by 50 percent–52 percent by 2030 and to reach economy-wide net zero emissions by 2050.
In 2017, President Donald Trump withdrew the United States from the agreement.
On President Biden’s first day in office, he recommitted the United States to the Paris Accords.
According to the Buckeye report, the biggest drivers of the current price hikes are the increased cost of fertilizers, many of which are derivatives of natural gas, and the increased cost of diesel and propane.
“After recommitting the United States to the net-zero climate-control agenda, the president and Congress revived significant misguided features of the once-failed ‘Green New Deal’ through the Inflation Reduction Act,” the report reads.
This includes using executive orders to restrict oil and natural gas supply, blocking drilling leases on federal lands, canceling pipelines, blocking exports of liquid natural gas, and enacting a Securities Exchange Commission mandate to require audited reports of greenhouse gas emissions, which would apply to farmers.
“These federal initiatives and requirements will prove expensive and economically destructive here—just as they have been in Europe,” the report reads.
‘Canary in the Coal Mine’
Europe leads the United States in enacting net zero provisions, and farmers there have been squeezed by rising costs as a result. Farmer protests have erupted throughout Europe over the past year, most recently breaking out in the UK and France, in response to government efforts to cut the use of synthetic fertilizers and clamp down on agricultural carbon dioxide emissions, with the goal of becoming carbon neutral by 2050.In the face of popular dissent, government officials in Europe have begun to backpedal on their commitment to cut greenhouse gas emissions by 55 percent by 2030 and by 90 percent by 2040.
The European Commission, which is the executive of the European Union, indicated that it would now consider exempting farmers from many of its climate mandates.
“You can look at Europe as the canary in the coal mine,” Mr. Hederman said. “We’re seeing what happens when you drive up fertilizer costs, playing out all over Europe right now.
“European governments are starting to have second thoughts about the draconian nature of the rules they are implementing, because they’re realizing this is not going to be sustainable and because farmers are furious.”
As farmers struggle, some climate activists see a solution in food alternatives, such as insect-based and fungi-based foods.
“I don’t think the poorest 80 countries will be eating synthetic meat [but] I do think all rich countries should move to 100 percent synthetic beef,” he said. “You can get used to the taste difference, and the claim is they’re going to make it taste even better over time.”
