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Starting this fall, Mexican sugar growers can
ship into the United States up to 10 times as much duty-free sugar
as now permitted.
The influx will be anything but sweet for American farmers who
already face a 25 percent drop in sugar prices this year and growing
resistance from lawmakers to continuing subsidies.
Regulations that take effect Oct. 1 allow Mexico to raise its
tariff-free sugar exports to 250,000 metric tons a year from 25,000.
The increase, negotiated in 1993 as part of the North American
Free Trade Agreement, is another blow to growers who, because of an
oversupply, already have seen prices drop to 21 cents a pound from
27 cents a year ago.
``We don't need another teaspoon of sugar,'' said Luther Markwart,
executive vice president of the American Sugarbeet Growers
Association, which represents 12,000 growers in a dozen states.
``It's a serious problem for our industry.''
Last month, the government had to buy 150,000 tons of surplus
sugar at a cost of $60 million to cover growers' minimum price
guarantees.
That ratcheted up calls to eliminate the federal sugar program, a
mixture of loans, price guarantees and import quotas designed to
soften economic blows on sugar farmers. The General Accounting
Office, Congress' investigative arm, added momentum to the cause
Friday with a report that concluded the program cost sugar refiners,
food manufacturers and consumers about $1.9 billion in 1998.
``The GAO has identified a clear example of corporate welfare
that Congress has the power to stop,'' said Rep. George Miller, D-Calif.,
an opponent of the sugar program.
In 1998, the GAO said, producers received $1 billion from the
sugar program: 70 percent to beet growers in northern-tier states
and California and 30 percent to cane producers, mainly in the
South.
Miller and other congressional critics hope to use the GAO study
as ammunition when the House takes up a farm spending bill this week
that has become the vehicle for annual attacks on the program.
Allied with them are large purchasers of sugar such as candy
makers and other food processors, consumer advocates and
environmental groups.
With sugar prices worldwide averaging 8 cents a pound, ``the
industry has some very threatening storm clouds on the horizon,''
said Rep. Earl Pomeroy, a North Dakota Democrat on the House
Agriculture Committee.
``Sugar beets have been the most successful crop grown by our
farmers,'' said Pomeroy, who defends the current program.
Jack Roney, an economist with the American Sugar Alliance, an
umbrella group of farmers, processors and suppliers, said the U.S.
Trade Representative's office is now trying to negotiate new terms
with Mexico on duty-free imports.
``We already have disastrously low prices because of our current
oversupply,'' Roney said. ``We're hoping to work out an arrangement
where their access is conditioned on our needs; so that when the
demand is higher, they would export more sugar, and when it's lower,
they would export less.''
That would only be through 2008, however, when the two countries
are to form a common sugar market. Tariffs on Mexican sugar, at 12
cents a pound now, are being phased out over the next eight years.
The Trade Representative's office confirmed that sugar trade
discussions with Mexico are in progress but would not discuss
details. However, the Mexican Embassy said the topic arose in a
meeting here Friday between President Clinton and Mexican President
Ernesto Zedillo.
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