He had heard about how foreign countries subsidize farmers
and make it unfair for the United States to compete in the
world sugar market. But a trip to England in the early 1990s
gave Del Traveller, Amalgamated Sugar Co's assistant
vice-president of agriculture, a first-hand lesson on the
subject.
"I learned a little bit about subsidies,"
Traveller said.
Visiting with an English farmer who explained the country's
quota system, Traveller heard how each farmer has a quota to
meet with guaranteed amounts to be paid. If a farmer
under-produces he risks having his quota reduced the next
year. So naturally, everyone tends to overplant, just in case
of bad weather or unexpected circumstances.
The farmer told Traveller the previous year had been an
excellent production year, and as a result his "Gift to
God" was large.
"I wanted to know -- what's a Gift to God?"
Traveller said.
It turned out that any sugar over the quota was given to
the government and in turn the free sugar was sold for a
ridiculously low price on the world dump market. And the
Mother Country makes a profit.
"When you compete with that, you don't stand a
chance," Traveller said.
The issue of the global sugar market is the single most
important problem facing U.S. sugar producers, industry
leaders told Congress last week as legislators prepare for the
new Farm Bill.
A number of issues were discussed with the House Ag
Committee, according to Mark Duffin, Idaho Sugarbeet Growers
Association executive director, including the marketing
assessment, the forfeiture penalty and loan rates in the sugar
program. But those issues are secondary to addressing NAFTA
and WTO, he said.
"Our proposals will not work unless the government
resolves problems with stuffed molasses and the Mexican
dispute over the NAFTA trade letter," Duffin said.
The industry also wants the Secretary of Agriculture to
retain the authority to limit imports under the tariff rate
quota system, he said, acknowledging that authority would
still be subject to WTO and NAFTA schedules and rules.
In addition, Duffin said some in Congress would like to see
the sugar program eliminated altogether, but he points out
that it is a protection not only for growers but also for
consumers.
Opponents to the sugar program want a simple
supply-and-demand system to dictate prices, but hearkening
back to the 1970s, Duffin talked about when the sugar program
-- tied to the world market -- was dropped for a while.
"Prices started jumping all over the place," he
said. "First they went through the roof, and then candy
and pop were ratcheted up. Then prices crashed, but user
prices never lowered. Eventually there was so much volatility
in the market, that we had a shortage, and sugar couldn't even
be found on supermarket shelves."
United States Department of Agriculture figures project
U.S. plantings of sugar beets to come in around 1.398 million
acres, or down about 9 percent, from last year. It is the
direct result of processing companies going out of business
due to record low prices. And many in the industry see the low
prices as a direct result of competing with subsidized foreign
producers.
For the time being prices on the domestic scene are a bit
better, and that gives hope to worried sugar beet growers, but
they need the help of Congress to maintain market stability,
Duffin said.
"There will be a lot developing as Congress goes to
work on this," Duffin said. "The House and Senate
aren't in sync yet , but a lot of homework is being done to
get ready" for the new Farm Bill. |