How crony capitalism dominates the sugar industry

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Next time I unwrap a candy bar, I’ll think of sugar, the open markets, the Florida Everglades, and Monica Lewinsky.

Why? Because while the sugar in this candy bar may be natural, its price is entirely artificial – dependent, as it is, on government trade barriers, price supports, and subsidized water, as well as the fact that the sugar industry pays only a fraction of the cost of cleaning up the Everglades.

Simply put, crony capitalism is alive and well in the sugar sector.

“The sugar industry doesn’t make its money from agriculture,” says David Guest, lawyer at Earth justice and a vocal critic of Big Sugar. “They are doing it from the government.”

This is an exaggeration, of course. Florida’s industry produces a lot of sugar, invests hundreds of millions of dollars in new equipment, and employs thousands of people, as I learned last week on a day-long visit to the area. of Lake Okeechobee in South Florida as part of the Society of Environmental Journalists conference in Miami. We met Guest from Earthjustice (“because the earth needs a good lawyer”), officials from the Florida water agencies and the Army Corps of Engineers, a biologist from Audubon and, more interesting still, Judy Sanchez, senior director of public affairs for US Sugar Corp.

American sugar and Florida Crystals, which is owned by the Fanjul family – formerly described by Time magazine as “First family of corporate well-being“- are the two largest sugar producers in South Florida. US sugar produces about 700,000 tonnes of sugar per year, or about 8 percent of US production. The sugar comes from sugar beets grown in the top Midwest, which gives the industry political power in Miami, Minnesota.

Sugar cane is, for the most part, an environmentally friendly crop. It is a perennial plant that requires little fertilizer and pesticides. When pest controls are needed, they are usually natural, like owls which are encouraged to nest in fields as they can eat up to 1,000 times their rodent weight each year. No part of the plant is wasted – the leaves and stems are burned to generate the electricity that powers the sugar refinery.

“Sugar cane basically needs two things – sun and rain,” Sanchez said. Florida has a lot of both. So far, so good.

The problem is that the rain is not distributed evenly throughout the year; it rains almost every day from june to october, and not much in winter. During the dry season, farmers water for irrigation of Lake Okeechobee to the north, after which the water flows south into the Everglades. As a result – and this is a simple summary of a complicated story, about which books have been written – the lake water contains high levels of phosphorus, a fertilizer, which threatens the Everglades, which is the subject of an $ 8 billion ecosystem restoration project, the largest in American history.

Sugar producers, as part of the restoration plan, were ordered to adopt best management practices to avoid unnecessary use of fertilizers. On average, they reduced the amount of phosphorus in their runoff by 55%, according to the South Florida Water Management District. But they further aggravate the problem and release water which requires extensive and expensive treatment.

More than 52,000 acres of land south of Lake Okeechobee has been converted to man-made wetlands to treat water, at a cost of approximately $ 1.5 billion to date. While producers pay an “agricultural lien tax” to support the project, this only covers a fraction of the cost, around $ 17 million per year. Certainly, upstream cattle and dairy farmers and landowners who fertilize their lawns generate even more excess nutrients. Allocating pollution cleanup costs is never easy; in this case, taxpayers pay most of the bill.

This is just one way for taxpayers to support the industry. The federal government also sets a floor on market prices by providing loans to producers that can be repaid by turning the sugar over to the government. Producers have not had to rely on this support lately, as demand for sugar has been strong. “Since the economy went down, sugar consumption has increased in the United States,” Sanchez said.

Then there is what Sanchez called “border protection.” No, these are not smugglers or illegal immigrants. What is stopped at the border by import quotas imposed by Congress is sugar from developing countries, India, Thailand and especially Brazil, which produces more sugar at a lower cost than the United States

It’s a good deal for Big Sugar and a good deal for the rest of us. Americans pay more for sugar – two to three times as much, according to a 2010 report by Citizens Against Government Waste, which opposes trade barriers. Worse yet, candy makers have moved production and jobs overseas to gain access to cheap sugar, according to a trade group called the Sweetener Users Association.

I asked Sanchez how quotas can be justified. She said they are inexpensive for consumers and protect an important national industry: “Sugar goes into all of our processed foods. America depends on other countries for oil and, she said, “the government doesn’t want us to do this for the sugar.” In addition, she told me, other countries subsidize their own producers.

“We would like a free world market,” Sanchez said. “Until we have widespread free trade, we don’t see why the United States should dismantle its food production, which is the safest and most efficient in the world and creates American jobs.”

But if other countries want to subsidize sugar and sell it to us, why oppose it? In fact, they are giving us a gift. If the prices go up over time, we’ll adjust. Who knows? People could eat less sugar.

The bottom line, however, is that while the United States is considered a market economy, sugar is not. And the rest of agriculture, energy and health care… but we’re moving away.

What about Monica Lewinsky? Well, on Presidents’ Day in 1996, Bill Clinton told him he “didn’t feel good about their intimate relationship anymore and had to end it,” according to the Starr report. Later, Lewinsky recalls, that was when the president received a phone call from a man named “Fanuli”. White House records identified the appellant as Florida sugar tycoon Alfonso Fanjul Jr. Clinton and Fanjul spoke for 22 minutes, presumably about the fact that a few hours earlier Vice President Gore had called for a tax of a dime on Florida sugar producers. to help restore the Everglades.

Guest says: “It gives you an idea of ​​the political influence they have – to be able to interrupt the president at a time like this.”

The tax has never been voted.

sugar cane photo via Shutterstock.

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