Recent Press Releases

Washington, D.C. —  U.S. Senators John Thune and Charles E. Schumer (D-NY) today introduced a bill (S.527) that will once and for all prevent the government from imposing an onerous "cow tax" on farmers across the country. Late last year, the Environmental Protection Agency (EPA) discussed regulating greenhouse gases in its Advanced Notice of Proposed Rulemaking under the 1990 amendments to the Clean Air Act, which could include requiring farmers to purchase expensive permits. Although the EPA did not propose moving forward with the permits, Thune and Schumer are taking preventive action to protect America's farmers. The "tax" would cost South Dakota farmers an estimated $367 million -- or $175 per dairy cow, $87.50 per beef cow, and $20 per hog -- fees that could put already struggling family farms on the brink of closure.

In a move to alleviate farmers' fears and ensure that such a proposal is never implemented, Thune and Schumer introduced legislation to prevent the EPA or any other governmental agency from imposing this fee on farmers.

"The Clean Air Act was written to curb pollution from smokestack industries, not to regulate livestock production in South Dakota or elsewhere," said Thune. "Livestock producers do not need another burdensome regulation to worry about, and this legislation would ensure that the `cow tax' never becomes a reality.

"Cattle and dairy production is vital to the economy of South Dakota and to our nation, and in these difficult economic times, it would be disastrous to enact policies that would increase food prices for all Americans. This bipartisan effort reflects our commitment to ensure overbearing proposed rules are never put in place."

"Times are hard for families across New York State, and they are particularly hard for our farmers. The idea of a imposing a cow tax on our farmers and adding one more crushing burden is absurd," Schumer said. "This bill will put an end to this inane `cow tax' once and for all."

In 2007, the Supreme Court ruled in Massachusetts, et al v EPA that the EPA cannot categorically refuse to regulate greenhouse-gas emissions under the Clean Air Act, a law that defines EPA's responsibilities for protecting and improving the nation's air quality. On July 30, 2008, in response to this, the EPA began to consider the implications of defining greenhouse gases as an air pollutant by issuing an Advance Notice of Proposed Rulemaking. This is typically a precursor to a proposed rule and the first in several steps in creating a new regulation. As a part of this process, the U.S. Department of Agriculture (USDA) responded to the Notice with a comment that defining greenhouse gases as air pollution may require the EPA to issue permits to farmers for their livestock. Currently, permits for other pollutants cost roughly $45 per ton, though that level can change. Title V of the Clean Air Act requires that permits be obtained by most large and small sources of air pollution.

The USDA indicated that if the EPA chose to move forward with regulating farm animals and requiring permits for emitters of methane, farms with more than 25 dairy cows or 50 beef cattle would need to purchase permits for each ton of methane their animals emitted. The American Farm Bureau Federation, assuming a price of approximately $45 per ton, calculated that this would cost $175 per dairy cow, $87.50 per beef cow, or $20 per hog. This regulation would cost a medium sized dairy farm with 75 to 125 cows between $13,000 and $22,000 a year. It would cost a medium size cattle farm with 200 to 300 cows between $17,000 and $27,000.

If enacted, these permits would be devastating to farmers and could put family farms at risk of going out of business. Beef and dairy products are part of a highly competitive global market, meaning American farmers cannot significantly raise prices when the cost of doing business in the United States rises. If forced to pay a "cow tax" or other additional fees, farmers could face a competitive disadvantage, which could close farms and lead to more imported food products.

Importation of dairy and beef products carries its own set of risks for consumers. Overseas livestock and dairy farms are often not regulated as stringently as U.S. farms, and cases of tainted agricultural and food products making their way into U.S. markets have proliferated in the last year. Most recently, baby formula in China containing dangerous levels of melamine and a salmonella outbreak resulting from contaminated jalape¤os from Mexico have rocked American consumers and put the U.S. imported food safety apparatus to the test.

South Dakota is in the heart of farm and ranch country and is a leading producer of livestock. South Dakota has 15,700 cattle ranches, 660 dairy operations, and 960 hog operations. With this new livestock fee, South Dakota farmers and ranchers would pay approximately $367 million in new fees each year to continue operating at current levels. The livestock sector break down for South Dakota is as follows:
  • There are 3.7 million beef cattle in the state of South Dakota, which would result in $323,750,000 in fees for South Dakota farmers
  • There are 1.42 million hogs in the state of South Dakota, which would result in $28,400,000 in fees for South Dakota hog farmers.
  • There are 85,000 dairy cows in the state of South Dakota, which would result in $14,875,000 in fees for South Dakota dairy farmers.
To ensure the burden of a cow tax is never placed on South Dakota farmers, Thune introduced a bill that will prevent the government from imposing the fee, by ensuring that Title V of the clean air act will not apply to methane emissions from livestock agriculture.

Below is the text of a letter from the American Farm Bureau Federation to Senator Thune and Senator Schumer supporting this legislation:

March 4, 2009

The Honorable John Thune
493 Russell Senate Office Building
Washington, DC 20510

The Honorable Charles Schumer
313 Hart Senate Office Building
Washington, DC 20510

Dear Senators Thune and Schumer:

On behalf of the American Farm Bureau Federation, the nation's largest general farm organization, I commend your bipartisan efforts to introduce legislation that would effectively prevent the Environmental Protection Agency (EPA) from imposing a fee or tax on American animal agricultural operations through the Title V permit program operated under the Clean Air Act (CAA). Farm Bureau supports this legislation and will encourage every senator to support it as well.

Last year, in an Advance Notice of Proposed Rulemaking (ANPR) issued by EPA, the U.S. Department of Agriculture noted: "If GHG emissions from agricultural sources are regulated under the Clean Air Act, numerous farming operations that currently are not subject to the costly and time-consuming Title V permitting process would, for the first time, become covered entities. Even very small agricultural operations would meet a 100-tons-per-year emissions threshold. For example, dairy facilities with over 25 cows, beef cattle operations of over 50 cattle, swine operations with over 200 hogs, and farms with over 500 acres of corn may need to get a Title V permit." (Federal Register, page 44377). Based on USDA's concerns, Farm Bureau consulted public documents and data available from EPA and the Department of Energy (DOE)[1] and calculated that the cost of such permitting could equate to $175 per dairy cow; $87.50 per head for beef cattle; and $21.87 per hog in swine operations. We included these figures in our comments on the ANPR to the agency.

These comments quickly entered the vernacular as the "cow tax," and reaction among farmers and ranchers across the nation was swift and widespread. While staff of EPA responded that the agency lacked authority for imposing such a tax, the agency in fact never spoke directly to the issue at hand - the fees associated with Title V permitting and how such fees might affect agricultural operations should the agency decide to regulate greenhouse gas (GHG) emissions under the Clean Air Act. Thus, the concerns farmers raised are real. They are all the more pressing now as the agency is reportedly looking at potentially regulating GHGs under the CAA.

The legislation you are introducing is timely and critical for farmers and ranchers. We welcome its introduction and look forward to working with you in favor of its consideration as Congress grapples with the many issues related to legislation that seeks to regulate and reduce carbon emissions.


Bob Stallman