Iowa Public Television

 

Sugar producers feel the squeeze of surplus production

posted on April 28, 2000


GRAIN FARMERS ARE NOT THE ONLY ONES WRESTLING WITH GRIM PROSPECTS. ANOTHER SECTOR OF AGRICULTURE IS ALSO CONFRONTING SOME SERIOUS FINANCIAL PROBLEMS OF ITS OWN.

BIG SUGAR HAS FALLEN ON HARD TIMES. AND FOR BETTER OR WORSE THE WOES OF THE POLITICALLY POWERFUL INDUSTRY COULD HAVE AN IMPACT ON OTHER FARM SECTORS.

FACED WITH LOW MARKET PRICES AND THE IMPENDING IMPORTS OF A CHEAPER MEXICAN PRODUCT THE KING OF SWEETENERS IS NOW JOCKEYING FOR BETTER POSITION AT THE SUBSIDY TROUGH. SUGAR PRODUCERS ARE THREATENING TO TAKE THE MONEY AND RUN, KEEPING FEDERAL LOAN PAYMENTS AND DUMPING MORE THAN A MILLION TONS OF SUGAR ON THE U.S. GOVERNMENT.

THE LOW PRICES ARE ATTRIBUTED TO INCREASED YIELDS AND PLANTINGS OF U.S. SUGAR CANE AND BEETS. THE OUTLOOK HAS BEEN EXACERBATED BY THE REDUCTION OF IMPORT QUOTAS AS MANDATED BY NAFTA.

AS A REMEDY TO THEIR PROBLEM PRODUCERS WANT THE GOVERNMENT TO BUY 1.4 MILLION TONS OF THE SWEET STUFF VALUED AT ALMOST HALF A BILLION DOLLARS. CURRENTLY, SUGAR PRODUCERS ARE GUARANTEED A PRICE ALMOST 4 TIMES THAT OF FOREIGN GROWERS. U.S. TAXPAYERS ARE THE ONES WHO MAKE UP THE DIFFERENCE BY PAYING AN ESTIMATED 1 BILLION DOLLARS IN PRICE SUPPORTS.

THE PROBLEM HAS BROUGHT OUT BIG SUGAR'S CONGRESSIONAL REPRESENTATIVES. SENATORS FROM 11 SUGAR STATES HAVE VISITED SECRETARY OF AGRICULTURE DAN GLICKMAN PRESSURING HIM TO BUY UP THE PROBLEM.

AT THE SAME TIME, INDIANA SENATOR RICHARD LUGAR, HISTORICALLY NO FRIEND TO BIG SUGAR, HAS CALLED THE PROPOSED PURCHASE ONE OF "DUBIOUS LEGALITY" AND IS CONCERNED ABOUT ANGERING TRADING PARTNERS IF THE PRODUCT WERE TO BE DUMPED ON FOREIGN MARKETS.

ONE ALTERNATIVE BEING BANDIED ABOUT IS TO TURN THE SUGAR INTO ETHANOL, MUCH TO THE CHAGRIN OF CORN ETHANOL PRODUCERS. CURRENTLY, CORN SELLS FOR ONE-THIRD THE PRICE OF THE SUPPORTED SWEETENER.

THE THREAT OF SHIFTING A LARGE PORTION OF THE ETHANOL MARKET AWAY FROM CORN GROWERS HAS UPSET OTHER FARM STATE LAWMAKERS. THE POLITICIANS FEAR THE NATIONAL CORN GROWERS ASSOCIATION IS RIGHT WHEN IT CLAIMS THE MOVE COULD DIVERT 100-MILLION DOLLARS AWAY FROM CORN GROWERS.

THE NEWS IS A BIT BRIGHTER FOR ANOTHER RURAL-BASED ALTERNATIVE ENERGY SOURCE. UNDER THE BIGGEST FEDERAL CONTRACT FOR "GREEN POWER" EVER ALL FEDERAL AGENCY OFFICES IN THE DENVER AREA WILL BE POWERED IN PART BY WIND GENERATED ENERGY.

THE CONTRACT MEANS 7.5 PERCENT OF THE GOVERNMENT'S ENERGY NEEDS IN DENVER WILL BE DELIVERED FROM RENEWABLE SOURCES. WIND TURBINES LOCATED ON THE COLORADO-WYOMING LINE WILL GENERATE MUCH OF THE 10 MEGAWATTS OF POWER. THE COST OF THE WIND GENERATED ENERGY IS ABOUT TWO PERCENT HIGHER THAN CONVENTIONAL SOURCES.

Tags: agriculture news sugar