Sugar mills pinched by price-support program

November 25, 2001|By JAY HANCOCK

THE WORLD Trade Organization has promised to really, truly help the global poor this time by dismantling the barriers erected by rich countries against developing nations' farm products.

But first it has to deal with the likes of Rep. Alcee Hastings, Domino Sugar and the American Sugarbeet Growers Association.

Last month, in opposing a measure that would have modestly increased the sanity quotient in U.S. agriculture policy, sugar interests laid it on thicker than a double-stuffed Oreo.

"When I drive down Highway 27 to Pahokee, I see a town choking. When I go on to Okeechobee, I have tears in my eyes at the pain that is caused because of the loss of jobs," Hastings, a Florida Democrat, shouted on the House floor.

Okeechobee and Pahokee are in Florida's sugar belt, and Hastings was decrying a bill that would have cracked the door for slightly higher levels of sugar imports.

After the measure was defeated, a Michigan sugar beet grower named Ray Van- Driessche praised Congress for not being "fooled by the real opponents of U.S. sugar policy - the giant, multinational food companies, candy manufacturers, grocers and others who want to fatten their bottom-line profits at the expense of America's efficient sugar farmers."

OK. Now close your eyes, click your heels and check in with reality.

The main reason for unemployment among sugar workers is not imports but automation by the big growers who write Alcee Hastings' campaign checks and are the prime beneficiaries of sugar welfare.

If U.S. sugar farmers are so efficient, how come their prices are twice as high as what sugar sells for elsewhere? And why do they need a tangled government price-support program that the General Accounting Office estimated costs American consumers $1.9 billion a year?

Big Sugar's biggest howler was trying to bolster its case by noting the recent closure of more than a dozen American sugar-processing plants. It is true that U.S. sugar mills are in trouble, but the program pushed by Hastings & Co. is the very reason many of the refiners are struggling.

It's hard to compete when the government makes you pay twice the market rate for raw sugar.

The federal price-support regime threatened the famous Domino Sugar plant on Baltimore's harbor before Domino resorted to the ultimate defensive strategy. The company couldn't fight the sugar farmers, so it joined them, getting sold three weeks ago to Florida Crystals Corp., a mega-grower.

Controlled by a flush, subsidized owner, assured of a continuous supply of sugar cane, Domino and its 500 workers are now solidly on the side of protectionism. The worldwide lobby against free trade just got a little stronger.

Multiply what happened with the sugar bill last month by dozens of other U.S. agriculture interests seeking to preserve their own frosting. Then multiply that by dozens of other industrialized nations, each with its own entrenched, subsidized sons of the soil, and you get an idea of what the World Trade Organization is up against.

Scrapping agriculture-import obstacles is the single most effective, compassionate, good thing rich countries can do to help the world's poor. The Third World already knows how to grow crops. That's about all it knows.

Developing-nation farmers don't need much training or capital. They're not as labor-efficient as U.S. agribusiness, but low wages make them competitive. The pittance they would earn from a free global crop market could double their standards of living.

For consumers in rich nations, however, the Third World larder is more or less locked up. Swayed by pastoral nostalgia and political full nelsons, rich countries shelter their own farmers on reservations rimmed with quotas, subsidies and tariffs. Offshore growers need not apply.

The average import duty on manufactured goods around the world is 4 percent; the average duty on agricultural products is 60 percent, according to the WTO.

The World Bank says global agriculture subsidies are six times greater than all the financial assistance rendered to developing nations by the entire developed world.

And my favorite agri-welfare fact: Government payments to the agriculture sector by the 30 rich-country members of the Organization for Economic Cooperation and Development exceed the gross domestic product of Africa.

In the United States, the biggest recipients of farm subsidies aren't even real farmers. They're large corporations or hobby-farmers such as media mogul Ted Turner, Portland Trailblazers star Scottie Pippen and oil fortune heir David Rockefeller, a Heritage Foundation study shows.

The developed world talks like the king of free markets but acts like the trade minister of Romania, circa 1975, when it comes to foodstuffs.

Government support for Switzerland's mountain farms reduces the risks of "dangerous avalanches," says Economics Minister Pascal Couchepin. Japan depends utterly on foreign oil but insists it must prop up rice growers for national security reasons. Likewise, Alabama Republican Rep. Terry Everett thinks the United States needs fat farm subsidies as a "safety net" for "America's national security."

Believe WTO Director-General Mike Moore when he said that getting delegates in Qatar this month to agree to even negotiate agriculture trade barriers was "difficult."

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