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WASHINGTON, July 26 /PRNewswire/ -- A sugar industry economist
said today at a hearing of the House Agriculture Committee that the
apparent trend toward agricultural free trade is showing alarming
signs of reversing itself.
Jack Roney, director of economics and policy analysis for the
American Sugar Alliance (ASA), said, ``The multilateral Uruguay
Round Agreement on Agriculture of 1995 and the more profound reforms
of the 1996 Farm Bill in the United States seemed to presage a sea
change: Governments removing themselves from the agricultural
marketplace.''
But, Roney said, ``Developments since that time overwhelmingly
suggest the opposite is occurring. Governments already heavily
involved in their agricultural markets remain entrenched; many
governments that had begun to remove themselves have reversed
direction.''
Roney was providing sugar industry views at a hearing convened by
Committee Chairman Larry Combest (R-TX) on current and future
agricultural policy. The ASA is the national coalition of growers,
processors, and refiners of sugarbeets, sugarcane, and corn for
sweetener.
In describing the sugar industry's hope for freer trade, Roney
said: ``Because of its competitiveness, with costs of production
well below the world average, the U.S. sugar industry supports the
goal of genuine, global free trade in sugar. American sugar farmers
cannot compete with foreign governments, but we are perfectly
willing to compete with foreign farmers in a truly free trade
environment.''
Roney expressed concern, however, that recent developments
suggest that free trade goal is more elusive than ever. ``U.S. and
world commodity prices plunged to historic lows in real terms the
past two years. Governments have rushed back into the marketplace to
protect farm prices, or income, or both, buttress their rural
economies, and ensure domestic food supply stability. Efforts to
initiate another multilateral round of reforms through the World
Trade Organization collapsed. Bilateral or regional trade agreements
have tended to exclude key agricultural products.''
Roney provided several examples. In the United States, despite
the 1996 Farm Bill's intention of ``phasing out'' commodity
programs, spending has ``exploded,'' from $5 billion in 1996 to more
than $32 billion this year. European and other traditionally
protectionist countries' agricultural subsidies remain entrenched.
Many key sugar-producing countries claiming to be free trade
oriented, such as Thailand, Mexico, and ``the supposed free-trade
paragon, Australia,'' are coming to the aid of farmers in economic
distress.
Roney listed several reasons for the intractability of
agricultural policies: ``Internationally, governments appear to be
recognizing the unique value and sensitivities of their agricultural
economies, and the economic and political dangers of deregulation.
Agriculture is uniquely sensitive to weather, disease, and other
natural disasters. Agricultural trade is uniquely distorted by the
breadth and depth of entrenched government policies. Agriculture
tends to be the primary, if not sole, employer in rural areas. And,
agriculture provides a product unique in the public's view of
essential products -- its basic food supply.''
Roney noted that, in part because of the crisis in the rest of
American agriculture, the U.S. sugar industry is now in crisis.
``The spillover of acreage from grains, oilseeds, and cotton to
sugarbeets and sugarcane has increased sugar production, contributed
to 20-year lows in U.S. sugar prices, and prompted the government to
make unprecedented purchases of sugar to reduce the surplus. Though
the cost of the purchases is minute relative to overall agricultural
spending, U.S. sugar policy will register a net cost to the
government for the first time in nearly two decades.''
Roney told the Committee the U.S. sugar industry would find a way
to survive this crisis and that, until other governments relinquish
policies that distort and depress the world sugar market, some
minimal U.S. sugar policy must be retained.
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