| ARLINGTON, Va., Feb. 23 /PRNewswire/ -- Representatives of
different segments of the domestic sugar industry gave similar
reasons for the present crisis in American sugar markets during
presentations here today at the Agricultural Outlook Forum 2001,
sponsored by the U.S. Department of Agriculture.
Luther Markwart, Executive Vice President of the American
Sugarbeet Growers Association and current Chairman of the American
Sugar Alliance, said, "The problems we face are not isolated,
but industry-wide. We cannot survive by living off of our equity or
cannibalizing our business. This industry is in serious
trouble."
Thomas McKenna, President of United Sugars Corporation of
Bloomington, Minnesota, also sounded a stern warning about the
industry's condition. He said, "The domestic sugar industry is
in a period of crisis and extreme uncertainty." He blamed the
"primary underlying reason ... is that government policy, as it
relates to the sugar industry, is not effective."
McKenna said the results of government policy are evident:
"Last year we experienced the lowest market price for sugar in
close to 20 years. As a result, at least 50 percent of the domestic
sugar industry is in a radical 'shake out' while most all
participants have put facility reinvestments needs on hold."
Markwart said that troubles in the sugar industry "should be
a concern to both our customers and to policymakers." He said,
"First, the government must work with the domestic industry to
immediately get supply and demand back into balance by disposing of
Commodity Credit Corporation-held sugar stocks by another
Payment-in-Kind (PIK) or PIK-like program, and sell some sugar as an
enhancement to the production of ethanol from corn."
Markwart said also that the government must stop the import
circumvention scheme of so-called "stuffed molasses" and
any other products for desugarization.
Third, Markwart said the U.S. and Mexico must resolve the
sweetener trade dispute.
"Fourth, as we move forward in future trade negotiations ...
our negotiators must not provide more access to the U.S. sugar
market than the residual needs of our market," Markwart said.
"If it is oversupplied by imports, no policy can work and no
industry can be sustained," he said.
In listing results of the financial stress the sugar industry
faces, Markwart said: Since the 1996 Farm Bill, seven beet factories
have been closed; the largest refined sugar marketer in the country,
which owns nine of the remaining 28 factories, is in bankruptcy; and
more than half of the beet sugar factories are for sale to their
growers, who are viewed as owners of last resort before closure.
Luis Fernandez, the Chief Financial Officer of Florida Crystals,
a privately owned cane sugar producer, in addressing the question of
how the industry got into the crisis it is in, said, "The
ability and flexibility of the USDA to manage the sugar program was
significantly reduced by trade agreements, primarily the Uruguay
Round and to a lesser extent, although growing in importance and
consequence, NAFTA."
Dean Gravois, a sugarcane farmer from Louisiana, said,
"Clearly, no program will work unless supply and demand are in
balance." He said imports should be the "residual
supplier" to the domestic market, that the "stuffed
molasses" issue must be solved, and that a reasonable solution
to the dispute with Mexico over NAFTA be found.
Gravois said, "Why should the hard work and huge investment
of our American sugar farmers be penalized by policies that protect
other WTO and NAFTA nations?"
The other presenters agreed with a statement Markwart made toward
the end of his talk: "Returns to the industry should be from
the market, not the government." They all agreed, too, that
changes are needed in policy to balance foreign and domestic
supplies with demand.
SOURCE American Sugar Alliance
Web Site: http://www.sugaralliance.org |