The U.S. sugar industry is at the center of a political storm buffeting the Bush administration’s top trade priority — the Central America-Dominican Republic Free Trade Agreement.
Sugar crops account for about 1 percent of the cash receipts received by U.S. farmers for their commodities, but sugar farmers and producers carry significantly more political weight in Washington. They are using every ounce of it to defeat CAFTA-DR.
“It is difficult to understand how the interests of one commodity — one commodity and I am talking about sugar — has largely outweighed the potential for regional stability in CAFTA countries,” Sen. Pat Roberts, Kansas Republican.
The answer lies in geography and carefully calibrated lobbying, said industry sources and Capitol Hill observers.
CAFTA-DR would bind the United States, Dominican Republic, Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua to a set of trade and investment rules. And it would allow the Latin American countries to export 164,000 tons of sugar to the United States, less than 2 percent of domestic production but a 34 percent increase in imports, according to the American Farm Bureau.
Sugar growers argue that the CAFTA-DR increase would disrupt a federal quota system and send sugar prices — and their livelihoods — plummeting. The industry, which employs 146,000, often finds a receptive audience.
“I rise today in opposition to … the agreement. I do it for one very clear and specific reason. CAFTA will greatly harm Louisiana’s sugar cane industry,” Sen. David Vitter, Louisiana Republican, said ahead of the June 30 Senate vote.
The Senate voted 54-45 to approve the deal. The House is expected to open debate as soon as this week, and opposition from sugar, labor and some manufacturers make the vote too close to call.
Sugar cane and sugar beets are grown in up to 16 states, with the heaviest concentrations in Minnesota, Louisiana, Florida, North Dakota, Idaho, Michigan and Montana — seven states that accounted for 11 “no” votes in the Senate June 30. Other states, such as Maryland, have refineries owned by farmers.
“The industry has historically had tremendous clout. A lot of it has to do with the fact that it’s in a lot of states, and it is an important crop in the states it’s in,” said Robert Peiser, president and chief executive of Imperial Sugar, a Sugar Land, Texas, refiner.
Imperial is a lonely voice in supporting CAFTA in an industry that almost unanimously opposes the pact. The company is not owned or operated by sugar cane or sugar beet farmers and would benefit from some additional imports.
The sugar industry has made more than $22.8 million in political contributions since 1990, according to the Center for Responsive Politics, a watchdog group.
“Sugar is a small industry with a disproportionate amount of influence in Washington. Sugar’s influence has been gained in large part through campaign contributions and lobbying,” said Steven Weiss, a center spokesman.
Senators who voted against the bill raised an average of $16,800 in individual and political action committee contributions from sugar cane and sugar beet growers since 1999, while senators who voted for the bill raised an average of $9,200 from the industry during the same period, the center said.
Food manufacturers, who largely oppose the sugar industry because its quota system elevates prices on a key ingredient in candy and other products, spent $24.8 million during the period.
The manufacturers spent heavily on some of the same lawmakers as the sugar industry, including pro-CAFTA-DR Sen. Charles E. Grassley, Iowa Republican, and Sen. Mel Martinez, Florida Republican.
Lobbying and political contributions are part of the political game in Washington, and so is payback. The sugar industry, with its outspoken opposition to CAFTA, may be isolating itself from wheat, rice, corn, dairy and other farmers who support it.
“Sugar’s insistence upon receiving special treatment makes it very likely that the rest of agriculture, which overwhelmingly supports CAFTA, may opt not to participate in sugar’s defense the next time that program faces a [World Trade Organization] challenge, budget reconciliation measure and the endless amendments to end sugar’s support program during the next farm bill. Let that warning be heard,” Mr. Roberts said.
The sugar industry is aware of its situation.
“We hear these threats, but how could you threaten us more than eliminating our industry?” asked Phillip Hayes, a spokesman for the American Sugar Alliance, an industry group that does not contribute financially to campaigns.