|
WASHINGTON, July 26 /PRNewswire/ -- Sugar representatives from
Michigan, New York, Minnesota and Hawaii testified before the Senate
Agriculture Committee today that prices American sugar farmers
receive for their crop have plunged 34 percent since the start of
the 1996 Farm Bill. The outlook is even more dismal if corrective
steps are not taken, they said.
The sugar officials said that unless flaws in existing trade
agreements are fixed, and loopholes that permit companies to
circumvent import quotas are closed, the crisis in the domestic
sugar industry will get worse.
Ray VanDriessche, president of the American Sugarbeet Growers
Association and a sugarbeet farmer from Bay City, Michigan, told the
committee that sugarbeet growers from around the country have asked
him to convey to this committee that ``economic crisis is plaguing
our industry.''
He said, ``This is not a crisis of a particular group of growers,
or growers in a particular region. Without exception, this economic
crisis is hitting every grower through the industry because every
grower's income is directly tied to the price of refined sugar.''
VanDriessche said, ``The current market conditions have not only put
our farmers at risk, but also our processing factories, their
workers and our rural communities.''
His sentiments were echoed by E. Alan Kennett, president and
general manager of Gay & Robinson, Hawaii. Gay & Robinson is
a family owned farming operation employing 270 people. Kennett said
sugar production in Hawaii is down by two-thirds since the early
1980s. No sugar is grown any longer on the island of Hawaii or on
Oahu.
He said, ``Unfortunately, since the demise of sugar on the big
island, nothing has replaced sugar as a viable agricultural crop and
the former cane lands remain idle, overgrown with weeds.
Unemployment is high and drug usage, marijuana growing and drug
trafficking have increased dramatically, as have the social problems
that are created by high unemployment and drug usage. ''
Testimony by James Horvath, president and CEO of American Crystal
Sugar Company, which operates five beet-processing facilities in the
Red River Valley of Minnesota and North Dakota, and that of Jack F.
Lay, president of Refined Sugars, Inc., of Yonkers, NY, supported
statements by VanDriessche and Kennett as to the causes of the sugar
price collapse.
Three basic reasons were given for plummeting prices:
1. Tariff rate quota circumvention by so-called "stuffed
molasses" brought in mainly through Canada in a scheme to evade
duty protections against highly subsidized dump-market sugar. Once
shipped to this country, the molasses is separated from the mixture,
leaving liquid sugar, which is then sold on the domestic market,
undercutting American producers. 2. Threat of increased Mexican
imports under the NAFTA. Horvath said, "Quite frankly, the
sweetener provisions of NAFTA are short-sighted and disastrous ...
It allows guaranteed imports of raw and refined sugar into the U.S.
without recognition of our import needs." 3. Increased domestic
production that is a result of: (a) lack of profitable alternative
crops; (b) three consecutive years of good weather that produced
excellent crops; and (c) companies attempting to maximize
efficiencies by greater throughput.
All four of the sugar representatives noted that despite the
dramatic plunge in wholesale refined sugar prices, there has been no
corresponding decrease in the grocery-store price of sugar or in the
price of sugar- containing products. These have actually risen from
6 to 10 percent during the past three and a half years that have
seen the sharp decline in the price farmers receive.
In commenting on the sugar industry position relative to
international trade, Lay noted that the sugar industry's position
has been and continues to be that globally ``all government supports
of sugar, both direct and indirect, be phased out.'' The U.S.
industry has maintained that because it is so efficient, it would do
well in such an environment.
Lay went on to say, ``The European Union, a large exporter, has
shown little interest in further internal reforms, and has recently
concluded several 'regional free trade' agreements that specifically
exclude sugar. Mexico has reacted to tough times by waiving payment
on large government loans to privatized sugar groups. Even
Australia, the supposed free trade paragon in agriculture, has
relapsed in the last two years into more traditional patterns of
conduct-coming to the financial aid of its sugar industry.''
|