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Sugar growers try to change playing field
By Craig Gustafson, McClatachy Newspapers
May 8, 2001
 
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.