Will The Sugar Program Displace Masses of American Farmers?
June 30, 2005
America’s sugar farmers are trying to block the new Central American Free Trade Agreement because it would allow a tiny increase in U.S. imports of low-cost cane sugar.
If the tiny minority of sugar farmers prevents farm trade liberalization, however, their greed will destroy the future prosperity for hundreds of thousands of American family farms that produce feed grains, oilseeds, meat and milk.
World demand for farm products will more than double in the next 50 years, but all of that market growth will be outside North America. Farm import barriers currently keep U.S. food and feed out of densely populated high-growth economies such as China and India. Unless they are lifted, American family farms will shrivel.
Putting our corn into subsidized ethanol instead of meat doesn’t provide as secure an income base as another $50 billion per year in real farm export earnings driven by the world’s expanding human food demand. If America hangs onto its sugar subsidies, there won’t be free trade for our farm exports. It’s as simple as that.
The Bush Administration has supported free farm trade in the current World Trade Organization negotiations—but hasn’t been willing to tangle on Capitol Hill with the 6,000 farmers who grow high-cost sugar.
Tropical cane sugar yields are twice as high as beet sugar yields, and thus American sugar prices are double those in the world market. America gets low sugar yields, but very high yields of feedstuffs, oilseeds and livestock products—areas where markets are bigger and increasing faster than in sugar.
Most of America’s cane sugar is grown in the Florida Everglades, where the government is spending billions trying to restore the ecology. Some say the biggest environmental problem is the sugarcane.
Still the sugar subsidy thrives.
The OECD says farm subsidies cost First World taxpayers $133 billion last year. Europe has long been the world’s biggest farm subsidizer, and American farmers have used the EU as an excuse for American farm subsidies. However, the EU has already agreed to eliminate its farm export subsidies if other nations also step away from government farming handouts.
The EU is also proposing to cut its sugar price support by 39 percent. EU farm commissioner Mariann Fischer Beol recently said, “In 2003 and 2004, the Common Agricultural Policy underwent a quiet revolution that all but ushered out farm subsidies linked to production. It would be madness to try to shield the sugar sector from this cleansing wave of reform.”
America’s farm subsidies rank third, behind the EU and Japan. The U.S. paid its farmers $40 billion extra in 2004, $25 billion in payments and $15 billion in higher prices for sugar, wheat, dairy products, etc. Unfortunately, the U.S. was the only country where farm subsidies have recently been rising. That works against our long-term farm export success.
The high cost of American sugar has already cost the U.S. more jobs in candymaking than there are in sugar farming. If we let the sugar lobby block farm trade, thousands of non-sugar farmers will lose their places, too, in the coming decades.
Farmers dare not let Big Sugar block farm export liberalization. Only in North Dakota, where sugar quotas abound in the Red River Valley, can the Congressional delegation stand up for sugar against the rest of the farming community. Let’s make sure the Congress understands that.
Posted in Commentary |