Bittersweet

Sugar has been a sweet business for U.S. cane growers and beet farmers, who are sheltered from foreign competition by regulations that severely restrict imports.

But American farmers and refiners in the sweetener industry think that system is being dismantled by the Bush administration, which is pushing a free-trade agreement that chips away at quotas, and attacked by a loose coalition in Congress and the food industry seeking cheaper imported sugar.

“I would say we feel particularly besieged right now,” said Carolyn Cheney, vice president for government relations at the Sugar Cane Growers Cooperative of Florida, a 55-farm group that plants 64,000 acres of sugar cane.

The Belle Glade, Fla., cooperative is part owner of three Domino Sugar Corp. refineries, including an 83-year-old plant in Baltimore’s harbor, an industrial holdout amid encroaching condominiums, shops and offices.

About 54 million pounds of the cooperative’s raw sugar — cane that is processed but not refined for industrial or consumer use — arrived at the Baltimore factory Monday, where it was unloaded from a barge into a storage shed in 7,000-pound scoops.

The bulky delivery is enough only to keep the factory’s 450 employees on full shift for almost nine days. The company also relies on raw sugar from other U.S. growers and farmers in the Americas and Asia to operate steadily.

That foreign sugar is imported under strict quotas that allow 40 countries to sell raw cane sugar to U.S. refiners. The cap keeps raw sugar prices in the United States more than twice as high as world prices, the Agriculture Department said.

Under the proposed Central American Free Trade Agreement, Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras and Nicaragua eventually would be able to export 164,000 tons of sugar to the United States. That is less than 2 percent of domestic sugar production, but would represent a 34 percent increase in imports, according to a report by the American Farm Bureau.

The trade group supports CAFTA as a $1.4 billion export boon for U.S. ranchers and farmers, but acknowledges that sugar is an exception. The U.S. industry would lose about $80 million because of CAFTA, the bureau estimated.

“Thousands of sugar workers would lose jobs because of CAFTA,” said Phillip Hayes, spokesman for the American Sugar Alliance, a trade group for growers, processors and refiners in an industry that directly employs 146,000.

The alliance also sees CAFTA as a dangerous precedent as the administration negotiates pacts with major world producers, such as Thailand and Brazil.

The U.S. industry carries political clout. Sugar beets are grown in 12 states and sugar cane is grown or refined in seven, creating broad support for the current system.

“Negotiating sugar trade in bilateral free-trade agreements is a recipe for disaster for the U.S. sugar industry, and it is unnecessary,” Sens. Kent Conrad, North Dakota Democrat, and Larry Craig, Idaho Republican, wrote to the Office of the U.S. Trade Representative earlier this year. The men represent areas where sugar beets are grown and processed.

The industry’s adamant opposition to CAFTA has jeopardized the pact. It also has angered free traders in Congress and helped coalesce support for a major change to the sugar program.

“By keeping U.S. sugar prices two or three times as high as prices in the competitive world market, our policies not only distort markets and inflate consumer costs, they also create a perverse incentive to move food-related jobs offshore to take advantage of lower costs for sugar there,” said Rep. Mark Steven Kirk, Illinois Republican and co-chairman of the Sugar Reform Caucus, a 16-member group founded in October.

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