Federal Sugar Subsidy Helps Destroy Florida Everglades
Title: Sour Deal: Federal Sugar Subsidy
Source: Charleston Gazette (South Carolina) letter to the editor
Status: Copyright 1999, contact source for permission to reprint
Date: October 24, 1999
Byline: Shireen I. Parsons
Every year, federal subsidies put billions
of dollars into the pockets of sugar cane
magnates. Flush with cash, they spend
millions buying politicians and blunting
reform efforts to halt the continuing
destruction of the unique environment
in the Florida Everglades.
In "The Sweet Hereafter", in the November Harper's, writer Paul Roberts documents the long-term costs of subsidizing sugar.
Three counties south of Lake Okeechobee produce more than half the nation's sugar cane. Cane fields have destroyed the natural saw-grass marsh over an area the size of Rhode Island.
Every acre is irrigated and drained with a costly series of pumps, dams, dikes and canals. Tax dollars pay for it all.
Federal sugar programs keep domestic prices at least 50 percent above world market prices. Artificially high prices encourage sugar growing in what would otherwise be economically marginal swampland.
"Like Elvis or sex," Roberts writes, "sugar is everywhere and in everything - our economy and politics, our language and demographic makeup, our physiology and mass psychology, and, of course, our diet".
Roberts dates Florida's sugar boom to the Cuban revolution. Shortly after Fidel Castro came to power, the United States embargoed sugar, cigars and everything else made in Cuba.
To replace lost imports, Florida's sugar-cane acreage jumped tenfold by the mid-1960s.
The biggest victim was the Everglades. The annual breeding population of elegant wood storks dropped from 20,000 in 1960 to 1,800 today.
The endangered Cape Sable seaside sparrow population dwindled from tens of thousands to 3,500. Biologists say this vanishing bird shows the declining health of the Everglades.
The key reforms are reducing phosphorus runoff from cane fields and restoring natural water flows.
But sugar cane cash still has the upper hand with politicians from both parties. Consider these facts:
In 1992, the Fanjul family, with vast holdings in Florida and the
Dominican Republic, began playing both sides of the political game. Pepe Fanjul was vice chairman of the Bush-Quayle Finance Committee. Alfy Fanjul backed Clinton and Gore and hosted a $120,000 fund-raiser.
After Clinton won, Interior Secretary Bruce Babbitt came up with a plan to save the Everglades very similar to one created by Alfy Fanjul. Taxpayers got to pay more than half the $700 million it would cost to filter pollutants from water flowing to the Everglades.
In 1996, sugar interests spent $25 million in an advertising campaign to successfully counter an environmental campaign run by Save Our Everglades.
In 1998, sugar interests in Florida spent $26 million on state political efforts from winning referendums to electing Republican Jeb Bush as governor.
Between 1990 and 1998, sugar interests spent $13 million on presidential and congressional races.
Today, domestic producers sell sugar at 22 cents a pound. Producers in most other nations get 8 cents. America's artificial price prop adds $1.4 billion to the shopping bills of U.S. consumers each year.
People like the Fanjuls get the best of both worlds. Owning half of all sugar lands in the Dominican Republic, they raise sugar cheaply, import it, then sell at artificially high U.S. prices.
Sen. Charles Schumer, D-N.Y., calls the federal sugar subsidy program "one of the most invidious, inefficient, Byzantine, special-interest, Depression-era federal programs".
Vice President Al Gore's plan to restore the Everglades over 20 years would cost taxpayers $8 billion. His program is backed by several environmental groups. But, Roberts point out, Gore's bill does nothing to regulate or curtail the vast sugar fields that created the problem in the first place. And the Fanjuls keep raising money for the Democrats.
Maybe the obstacles are just too great. Unions back sugar because they fear thousands of jobs could go overseas. Politicians back sugar because they get paid so well. And, all the while, Americans are paying nearly three times too much for sugar.
Shireen I. Parsons
"There are joys which long to be ours. God sends ten thousand truths, which come about us like birds seeking inlet; but we are shut up to them, and so they bring us nothing, but sit and sing awhile upon the roof, and then fly away".
- Henry Ward Beecher
Frequently Asked Questions
Q: What is the Everglades Trust?
A: A 501(c)(4) corporation of non-elected board appointees, created to ensure Everglades restoration is completed on time and on budget. The Everglades Trust is committed to defend America’s Everglades and hold polluters and lawmakers accountable.
Q: How will the Everglades be restored?
A: The Comprehensive Everglades Restoration Plan (CERP) was approved in 2000. Made up of over 60 major components, the CERP is a $7.8 billion, thirty-year plan. The plan is designed to repair the ecosystem of the Everglades to the conditions in which it was in before Everglades drainage began to destroy the natural water flow.
Q. Have any of the more than 60 component projects been authorized?
A: Yes, in 2000, 4 pilot projects at a total cost of $69 million:
1. Caloosahatchee River (C-43) Basin ASR
2. Lake Belt In-Ground Reservoir Technology
3. L-31 N Seepage Management
4. Wastewater Reuse Technology
And 10 projects and the Adaptive Assessment and Monitoring Program at a cost of $1.1 billion:
1. C-44 Basin Storage Reservoir
2. EAA Storage Reservoirs--Phase 1
3. Site 1 Impoundment
4. WCAs 3A/3B Levee Seepage Management
5. C-11 Impoundment and Stormwater Treatment Area
6. C-9 Impoundment and Stormwater Treatment Area
7. Taylor Creek/Nubbin Slough Storage and Treatment Area
8. Raise and Bridge East Portion of Tamiami Trail/Fill Miami Canal within WCA3
9. North New River Improvements
10. C-111 Spreader Canal
Q: How many of the authorized projects have been completed or are underway?
A: None. Florida Big Sugar has been successful at delaying the Restoration at every juncture.
Q: Do sugar crops play a major role in American culture?
A: No. The crops play an exceptionally small role in agriculture. They are planted on less than one percent of the nation's farms, and account for less than one percent of the planted acreage, and little more than one percent of total cash receipts from farming.
Q: Do sugar imports threaten the domestic sugar industry?
A: No. Sugar imports are declining, not increasing. When the Government's sugar subsidy program was adopted in 1981, imports totaled over 5 million tons. Today, they are little more than one million tons because the program stimulated a tremendous increase in domestic production.
Q: Is the Federal Sugar Program needed to protect consumers from high sugar prices?
A: No. It is estimated that consumers pay an extra $2 Billion annually in higher food prices.
Q. Does the sugar subsidy program merely provide a “safety net” designed to protect sugar producers and processors from bankruptcy?
A: No. It's not a “safety net,” it's a “hammock.” The program guarantees a profit to even the most inefficient of producers, and provides a windfall to the efficient producers, many of whom are corporations.
Q: Do other commodities receive the same protection?
A: No. The price supports provided to sugar producers are far more generous than the supports for other food crops.
Q: Is it a true market price, if world sugar is dumped on the market?
A: Three of the largest exporters, Australia, Brazil, and Thailand, are able to expand production and exports at world prices without the aid of subsidies. The U.S. price of raw sugar is currently three times the world price.
Q: Is the sugar program a burden on taxpayers?
A: In 1984, Commodity Credit Corporation sales of forfeited sugar cost the taxpayers $83,000,000. The program forces the government to pay millions more for its purchase of sugar and sugar containing products. In 2000 the cost to taxpayers was $459 Million for the loan default-buy back program.
Q: How much of the sugar subsidy benefits go to Florida privately-owned corporations (Big Sugar)?
A: $130,000,000 to the Fanjuls (Flo-Sun Corporation) and $95,000,000 to the Mott Foundation (51% owner of U.S. Sugar Corporation) in 1996 dollars.
Q: I've heard the sugar industry employs 420,000 Americans. Is this true?
A: USDA and Census data indicates that the sugar industry only employs from 40,000 to 70,000 people nationwide. And many of these are seasonal laborers. Tens of thousands of jobs have been lost in the cane sugar refining and the food processing industries as a result of the subsidy program.
Tabacco: The Fanjuls are Skunks, not the only Skunks in this drama, but the Primary Sugar Skunks. But I felt it incumbent to say something about the Everglades besides “it is being destroyed”.
From this point forward, this Post becomes pedantic, tediously detailed Everglades Case Studies, interesting only to the most avid and intellectually gifted readers. Tabacco admits without shame that I publish it without benefit of having read it myself. But in good conscience, I felt that omitting it would deny those of you, who trust Tabacco to be not only truthful, but comprehensive, regardless how boring the text may be. But even Tabacco has his limits! So after that disclaimer, I give you:
TED Case Studies
Everglades and Trade
CASE NUMBER: 106
CASE MNEMONIC: EVER
CASE NAME: Everglade Sugar Farms
1. The Issue
The rich marshlands of southern Florida known as the
Everglades are in jeopardy. The Everglades are half the size
they were in 1900 and many species that once called the
Everglades home are now extinct. Over the last several decades, major engineering projects have drained the area for agriculture and residential development. The sugar cane industry is one of the largest contributors to this deterioration. As a result, the sugar cane industry has spent many years in court fighting lawsuits. However, in May, 1994, the Florida legislature passed the Everglades Forever Act, which calls for a multi-million dollar restoration plan over several decades. The case also depends on U.S. trade quotas that limit foreign sugar imports.
In the early 20th century the Everglades were seen as a
troublesome swamp that would be better off drained and plugged up. After a series of hurricanes flooded the area and killed a number people that is exactly what happened. In 1948 the Army Corps of Engineers created the Central and Southern Florida Project for Flood Control and Other Purposes whose "mission was to make the coast safe for development, the interior south of Lake Okeechobee safe for farming, and areas like the park secure for plants and animals".
The army divided the Everglades into four major reservoirs
including the Everglades Agricultural Area and the Everglades
National Park. A system of levees and canals border these
reservoirs and control their water flow. The problem with the
system is that the South Florida Water Management District, who controls water flow in the everglades, releases water in the wrong area at the wrong time.
Environmentalists have challenged this project from its
inception. In 1983, they found a sympathizer in Governor Bob
Graham. When he came to office he launched the Save Our
Everglades Campaign with the purpose of restoring the Everglades to its condition at the beginning of the century. Many organizations have joined the fight to save the everglades. Over the years these groups have gone to battle several times with the major sugar companies in an attempt to save the Everglades. The courts have had to decide what role the sugarcane industry should play in the restoration of the Everglades. Early last year the Florida Supreme Court rejected a proposed penny-per-pound tax on raw sugar to fund the everglades restoration project. The state did however reach an agreement with the sugar companies in May of 1994. The agreement requires the sugar companies to pay at least $230 million for cleanup and to reduce the phosphorus runoff from their farms, but allows the industry to stay in business.
The Everglades now has 440,000 acres of sugar cane and the major sugar companies in Florida have of course resisted this restoration effort. They challenge the part of the plan that
requires them to pay for the cleanup of the polluted saw grass
marshes. The fertilizers used in harvesting sugar cane contain
chemicals that are harmful to the Everglades eco-system. The
farming of the sugarcane also causes phosphorus and nitrogen to be released from the soil. The nitrogen and phosphorus then flow down stream from the agricultural areas, causing ecological damage in the sawgrass marshes.
There are many native species that call the everglades home that have been endangered by the nutrient runoff from sugar farms. This includes animals like alligators, crocodiles,
panthers, turtles, and over 300 bird species of birds, notably,
the Everglades kite, short-tailed hawk, bald eagle, osprey,
peregrine falcon, wood ibis, roseate spoonbill, mangrove cuckoo, and Cape-Sable sparrow. The Everglades are also rich in plant life, such as the lilypad, water shield, sawgrass, bald cypress, and palmetto. In the freshwater rivers that run through the sawgrass prairies there are many types of fish such as the large mouth bass and bluegill. However, because of the nutrient runoff they are loaded with mercury, and therefore unfit for human consumption. The excess of nutrients has caused changes in periphyton, the algal base of the Everglades marshes, and created an eruption of cattails that are choking the live out of this wildlife.
3. Related Cases
(1): Trade Product = OIL
(2): Bio-geography = TROPical
(3): Environmental Problem = DEFORestation
4. Draft Author: Kimberly L. Mott
B. LEGAL CLUSTER
5. Discourse and Status: AGREE and COMPlete
As stated above there have been several court cases
involving the sugarcane industry's role in the destruction of the
everglades and what should be done to restore its ecosystem. The discourse of this case is agreement. One of major sugar
companies, FLO-SUN Inc., agreed in January of last year to pay as much as $100 million to finance the cleanup of the phosphorus runoff from their farms. the U.S. Sugar Corporation, the other major producer in South Florida, declined to join the agreement. However, as of January, 1994 the state reached an agreement with the sugar growers requiring them to pay their part in the cleanup effort.
6. Forum and Scope: USA and UNILAteral
7. Decision Breath: 1 (USA)
8. Legal Standing: SUBLAW
The legal standing of case is sublaw because it involves
agreements in state law. In May, 1994, the Florida Legislature
passed Everglades Forever Act, which calls for a multimillion
dollar restoration plan over several decades. About 40,000 acres of man-made filtration marsh are scheduled to be constructed to reduce the level of phosphorus in water flowing into conservation areas and eventually into the Everglades National Park. In the future some of the acreage for the filtration marshes could be taken from land currently in sugar cane production.
C. GEOGRAPHIC Clusters
9. Geographic Locations
a. Geographic Domain: North America [NAMER]
b. Geographic Site: Eastern North America [ENAMER]
c. Geographic Impact: USA
10. Sub-National Factors: YES
There are sub-national factors associated with this case
because it involves the State of Florida.
11. Type of Habitat: TEMPerate
D. TRADE Clusters
12. Type of Measure: SUBSIDY
In 1981, U.S. Congress passed the Farm Bill establishing
a full system of sugar price supports. Under the bill, the
government loans money to the sugar mills, accepting sugar in the case of default. It also set artificial selling price for
sugar called "market stabilization price". In 1982, Congress
established quotas and tariff levels on sugar to keep domestic
prices high in order to guarantee the industry against losses.
When prices dropped below the artificial MSP in 1985 the mills
forfeited the sugar in order to keep the loan money. To avoid
any more expensive forfeitures the government now severely
restricts imports to keep sugar prices artificially high.
The current import quota system allows entry at the rate of
0.625 cents per pound, except sugar from Caribbean Basin
Initiative countries and the Generalized System of Preferences
countries, that enter duty free. Any non-quota sugar entering
the U.S. for consumption is subject to a duty of 16 cents per
pound. However, with the passage of the new GATT agreement it will be raised to 17 cents per pound in 1995 and then pushed down to 14.45 cents per pound over 6 years. Because of the sugar program Americans are force to pay higher prices on virtually every product that contains sugar.
13. Direct vs. Indirect Impacts: INDirect
The impact on trade is indirect because the laws being
implemented as a result of the case are environmental which have an indirect effect on trade.
14. Relation of Measure to Environmental Impact
a. Directly Related : NO
b. Indirectly Related : YES SUGAR
c. Not Related : NO
d. Process Related : YES HABITat Loss
In this case there are no trade laws that have been created
because of the environmental problems in the case. The laws that were created are simply for restitution of damages caused by the sugar industry to the ecosystem of the Everglades.
15. Trade Product Identification: SUGAR (Raw)
16. Economic Data
Based on information reported in the 1990 Book of Vital
World Statistics & The 1994 Statistical Abstract of The United
States the sugar industry's total output was 6,415 in 1988 and
there were a total of 1,655 people employed in food industry
in 1993. Industry output in 1934 was 110.24 million metric tons
and employment totaled 18,000 workers in 1993.
17. Impact of Measure on Trade Competitiveness: MEDium
Because this case forces the sugar industry to pay for the
environmental problems it has created in the Everglades, the cost for that restitution is then passed on to the consumer. As was mentioned above, because of the sugar program Americans are forced to pay not just an extra 60 cents on every five-pound bag of sugar but higher prices on almost every product that contains sugar.
18. Industry Sector: FOOD
19. Exporters and Importers: USA and MANY
The following information is based on data from the 1992 FAO Yearbook and The 1994 USDA Sugar and Sweetener Situation and Outlook Report. For fiscal 1995, the regional distribution of sugar deliveries is expected to be the strongest in the North-Central States because of the high concentration of industrial users such as the confectionery, bakery, and cereal industries in these states. Sugar deliveries to the North-Central States totaled 2.98 million tons in fiscal 1994 and deliveries to the South totaled 2.55 million tons.
The United States exported 242.9 thousand metric tons of
sugar in 1993/94. U.S. refiners export domestic sugar under the reexport program and deferring the import of raw sugar to 1996, due to spreads between nearby and distant futures prices. This is reducing the availability of sugar for the domestic market. In comparison Cuba exported 3.20 million metric tons in 1993/94.
Cuba remains heavily dependent on sugar exports to generate income to buy food, oil, consumer goods, and production inputs on the world market. While higher world prices can be expected to generate improved per unit export revenue, lower export volume is likely to dampen Cuba's sugar export earnings potential in fiscal 1995. The Russian Federation imported 3.15 million metric tons in this period. The principle source of imported raw sugar continues to be Cuba, which supplied Russia with 1 million tons of raw sugar in exchange for 2.5 million tons of oil.
E. ENVIRONMENTAL Clusters
20. Environmental Problem Type: HABITat Loss
The sugar industry applies to both general habitat loss and
bio-diversity loss because the phosphorus run off from the
agricultural area destroys the general habitat of Everglades
in turn causing bio-diversity loss.
21. Name, Type, and Diversity of Species
Land species, such as alligators, and air species, such as
birds, lose their feeding grounds because of phosphorus
destruction & die off. Sea species loss includes stone crabs,
dolphins, sharks, & barracuda because the phosphorus runoff
eventually reaches Florida Bay, polluting it. Sink problems
include accumulations phosphorus and nitrogen.
Diversity: 19,473 higher plants per 10,000 km/sw (USA)
22. Impact and Effect: High and REGULatory
23. Urgency and Lifetime: LOW and 100s of Years
Many of these species could be gone by the year 2000 if
something is not done the change the current situation.
24. Substitutes: SYNTHetic
This case can apply to both the development of synthetic
alternatives such as NutraSweet and switching to like products
such as honey. However, replacing sugar with substitutes would hurt the industry and causes severe job loss.
F. OTHER Factors
25. Culture: No
26. Trans-Boundary Issues: No
27. Rights; YES
The sugar companies in Florida such as U.S. Sugar Corp. & FLO-SUN Inc. hires considerable amounts of labor and some times abuses them.1 U.S. Sugar was indicted for slavery in 1942 for its treatment of African-American workers, so the company began hiring Jamaican workers the following season. The companies turned to the West Indies because there is an inexhaustible source of labor. The sugar industry as a whole has been employing Jamaican and other Caribbean cutters since 1944. The growers prefer Caribbean workers because they are able to export them if labor disputes arise. Men from the West Indies are employed on a temporary basis for a few months during the harvest. The workers live in camps near the sugar fields in run down barracks with no privacy. The stalls in the bathrooms do not even have doors. Employers frequently cheat the workers on their wages and force them to work in conditions near those of slavery.
28. Relevant Literature
Billington, Thomas H. "The Unsweetened Truth About Sugar
Subsidies." Reader's Digest August, 1987: 51-54.
Binger, Al. "Unintended Consequences." EPA Journal
Carney, James. "Last Gasp for the Everglades." Time
September 26, 1989: 26-27.
Cushman, John H. Jr. "Negotiations to Restore Everglades
Collapse." The New York Times December 17, 1993,
Cushman, John H. Jr. "Everglades Clash Threatens Accords."
The New York Times December 19, 1993, 1:31.
Cushman, John H. Jr. "Growers Pushed to Help Everglades."
The New York Times January 16, 1994, 1:18.
Derr, Mark. "Redeeming the Everglades." Audubon
September/October, 1993: 48+.
Douglas, Sue. "Save The Everglades." Oceans, March,
Jackson, Jerry. "Mexico Imports Pose Challenge; Trade Pact
Threatens To Drive Many Farmers Out Of Business Florida
Forecast." The Orlando Sentinel January 9, 1995
Levison, Marc and Peter Katel. "Not So Sweet in Sugar Land."
Newsweek October 14, 1991: 49.
Kriz, Margaret. "Mending the Marsh." National Journal March
12, 1994: 588-593.
Noah, Timothy. "Flo-Sun Negotiates Cleanup of Runoff From
Everglades." Wall Street Journal January 14, 1994, A:
1. Timothy Noah, "Flo-Sun Negotiates Cleanup of Runoff From
Everglades," Wall Street Journal, January 14, 1994, A:12.
I consider myself both a funnel and a filter. I funnel information, not readily available on the Mass Media, which is ignored and/or suppressed. I filter out the irrelevancies and trivialities to save both the time and effort of my Readers and bring consternation to the enemies of Truth & Fairness! When you read Tabacco, if you don’t learn something NEW, I’ve wasted your time.
In 1981's 'Body Heat', Kathleen Turner said, "Knowledge is power".
T.A.B.A.C.C.O. (Truth About Business And Congressional Crimes Organization) – Think Tank For Other 95% Of World