WASHINGTON - Last year, when sugar prices hit a
22-year low, the federal government paid Jay and Carl Nord to
destroy 40 acres of their sugar beet crops.
The Wolverton, Minn., farmers blame their woes on the
nation's free-trade policies: When Congress passed the North
American Free Trade Agreement (NAFTA) in 1993, it opened the
door for more sugar imports from Mexico, and now the United
States faces a glut of sugar that threatens to collapse the
industry.
"It's sinking all of us," said Jay Nord, who
farms 660 acres of land with his brother.
Seeking a bold fix, sugar producers are asking Congress to
renegotiate the historic free-trade agreement, a pact that the
industry once supported. But those prospects appear dim.
"There's no other support to do this, other than in
the sugar industry," said Rep. Collin Peterson, D-Minn.,
a member of the House Agriculture Committee.
Supporters of free trade aren't too sympathetic.
"If the domestic sugar industry is feeling the pain
from imports - tough - we have a free market economy for a
reason," said Jerry Taylor of the Cato Institute in
Washington, D.C., a libertarian foundation in favor of free
markets and limited government. He said the government
"shouldn't be in the business of propping up
uncompetitive industries."
Ken Cook, president of the Environmental Working Group, a
longtime critic of agricultural subsidies, said that the
industry brought the problem upon itself by supporting the
free trade agreement.
"When it comes back to bite them, they're the first to
go to the government and say you've got to fix it," Cook
said.
Sugar industry leaders disagree, saying they were duped
into supporting NAFTA.
"Our trade people always are assuming the other
country is going to do what's good for everybody, and that's
not the case," Nord said. "The other countries are
going to do what's best for them."
As Congress begins deliberations on the 2002 farm bill,
sugar growers are out to stave off the influx of imports -
legal and illegal.
"We're treading on some very uncertain times right
now," said Mark Weber, executive director of the Red
River Valley Sugarbeet Association.
Under NAFTA, the United States is required to accept
250,000 metric tons of sugar from Mexico tariff-free beginning
this year. Sugar accepted beyond that is charged with a fee,
which decreases each year until 2008, when no-holds-barred
free trade between the two countries goes into effect.
Industry experts are afraid that government subsidies could
lead to Mexican sugar becoming cheaper to purchase than
American sugar, despite the import tax.
"It's getting close. ... We're near that type of
break-even point," Weber said. As much as a million tons
could then be dumped on the U.S. market, leaving a large chunk
of domestic sugar with no place to go, he said.
As a member of the World Trade Organization, the United
States has also agreed to annually import 1.25 million metric
tons of sugar from the rest of the world.
The imports, coupled with good weather and efficient
production on the domestic side, has caused a surplus. Weber
said the federal program demonstrates all the more reason why
the problem with Mexico needs to be fixed.
"We don't need one more spoonful of sugar,
period," Weber said. "Any extra sugar coming in is
causing even greater problems for our producers."
Peterson said that while he sympathizes with the industry
he doesn't see how the trade agreement can be reworked.
"I just don't see where you get any leverage to change
things at this point," he said. |