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OPINION: Carbon tax proposal detrimental to (Washington) ag industry

June 1, 2015 by Rohan Nongpiur

Frank Lyall, President, Yakima County Farm Bureau (first published by Yakima Herald)

Carbon taxes or a cap-and-trade policy are a particular burden to agriculture and the Yakima Valley farm economy. Gov. Jay Inslee’s cap-and-trade plan would tax 132 of the largest carbon emitters in the state, such as petroleum wholesalers, fertilizer producers, tire and light equipment manufacturers, food processors and other suppliers to the farming and ranching sector. These industries would have no choice but to pass these increased taxes down to the end user, which would be our growers and employees.

Agriculture is the process of converting capital, which in our case are carbon inputs, such as labor, fossil fuels, petrochemicals, fertilizer and machinery into the usable carbon products of food, textiles and paper, medicine, construction materials and fuel. Thankfully in Washington state we also get a welcome assist from hydropower, but make no mistake, carbon taxes put the Yakima Valley economy in the bull’s-eye.

Taxing carbon emissions would have a disparate impact on those who could least afford it. Eastern Washington is a socially, economically challenged area that is highly dependent on international trade and so subject to the oscillations of the global economy. We can ill afford to increase the costs of our inputs, when in the face of brutal, global competition we cannot pass these costs on to consumers in other states and countries.

For rural working people, a cap-and-trade tax would have a negative impact on their standard of living. The cost of propane and petroleum fuel for heating homes and transportation consumes a significant amount of the household budget and increased gas costs reduce labor mobility, both to the detriment of the employer and worker. For farmers and processors, carbon taxes reduce demand, for our products do to increased transportation costs.

Though Gov. Inslee likes to play up his Eastern Washington roots, his cap-and-trade proposal beggars farmers who are rooted on the land, while the Washington state tech, retail and large manufacturing industries have the option to design products here and then set up production plants in other states or overseas that have lower taxes and labor costs. They can then reimport those goods back into the state. This is not an option for Washington agriculture, which pays the highest minimum wage in 50 states and all major agricultural nations, save for Australia.

A way forward for our local economy would be to increase the number of food processors and packers, which add value to our farm commodities. Likewise it would be of benefit to the Yakima Valley economy to be able to maximally, locally produce supplies, hard goods and machinery for our agricultural industry. A cap-and-trade tax prevents the establishment of support industry for agriculture, or causes present industry to flee to other states and overseas.

The Yakima Valley is a phenomenon: It is one of the most productive agricultural areas in the world and yet being a long way from major markets both nationally and internationally, our farm economy has a tenuous existence. We lead the nation in the production of apples, hops and mint and much of it is for export overseas.

We also export large amounts of other fruit, grain, hay, milk, potatoes and other farm commodities. This cap-and-trade proposal is coming at a time when we are facing a cyclical, likely prolonged retreat in agricultural commodity prices. Apples, juice, potatoes and many other products are at or below the cost of production.

At the state level, I would ask the governor, our legislators and the electorate to not unilaterally increase the cost of production for Washington state farmers and industry. This remarkable bounty we have in the Yakima Valley should not be taken for granted by our policy makers and yet, this cap-and-trade tax does just that.

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