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Published July 06, 2010, 10:07 AM

Valley’s sugar beet industry in trouble if cap and trade passes

FARGO, N.D. — The more we learn about so-called cap-and-trade carbon legislation in Congress, the more it seems like an idea whose time has not come.

FARGO, N.D. — The more we learn about so-called cap-and-trade carbon legislation in Congress, the more it seems like an idea whose time has not come. Even its newest iteration, which is being sold as a kind of cap-and-trade light, looks to be a job-killer that would heap impossible burdens on industry and business. It’s still a work in progress, so blanket condemnation is premature. But what is known thus far suggests the bill has little chance of clearing the U.S Senate.

That would be good news for sugar beet growers and processors in the Red River Valley of North Dakota and Minnesota. The U.S. House version of the bill, which has passed the House, in time would kill the local sugar beet industry, according to David Berg, president and chief executive of American Crystal Sugar Co. The Moorhead, Minn.-based farmer-owned cooperative grows beets on thousands of valley acres and operates processing plants in both states.

Vulnerability

While farmers would be exempt from most provisions of the legislation, the beet processing plants use coal. If the factories are vulnerable, producers are at risk. Berg says if the carbon credit provision of the climate-change bill became law, the beet industry in the region would become “a historical anachronism” within two or three decades. His remarks were in an Agweek (May 31) story by reporter Mikkel Pates.

Berg is not one to exaggerate. His leadership at American Crystal has been distinguished by a low-key, informed and open management style. He’s a skilled and reliably candid communicator when it comes to telling the company’s story. His concern about the proposed legislation is genuine and grounded in sound economic analysis.

The company has not ignored its carbon footprint, having improved coal-use efficiency some 20 percent largely as a cost-saving measure, which obviously has environmental benefits. But such benefits only can be achieved when the economics work. A regulatory club of the sort threatened by cap and trade could devastate one of the most important agribusiness sectors in the region.

The valley’s sugar beet industry is one of the most efficient and cost-effective farm cooperatives in the world. The industry has made strides in reducing carbon use and adopting environmentally sound policies and practices on farms and in processing plants. Moreover, its importance to the regional economy cannot be overstated. Federal legislation that torpedoes such success should be revised or scuttled.

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