Our Corrupt System: The Politics of Sugar

Today, as it has for many many years, The New York Times today slams the sweet deal given to the American sugar industry:

[S]ugar supports cost American consumers — who pay double the average world price — more than $1.5 billion a year. The system also bars farmers in some of the poorest countries of the world from selling their sugar here.

The North American Free Trade Agreement is about to topple this cozy arrangement. Next year, Mexican sugar will be allowed to enter the United States free of any quotas or duties, threatening a flood of imports. Rather than taking the opportunity to untangle the sugar program in this year’s farm bill, Congress has decided to bolster the old system.

Big Sugar is not the only beneficiary of this corporate welfare. The farm bill is larded with subsidies and other rewards for agricultural producers. The eagerness of members of Congress to please their sugar daddies is not surprising. Campaign donations from the sugar industry have topped $3 million in each of the last four political cycles. American consumers and taxpayers, as well as poor farmers overseas, shouldn’t have to pay the price.

This is of course all true, but the sugar industry is not the only egregious manipulator of our political system. But I want to concentrate on a different point, of personal interest to me. It is the fact that this system does not protect industries and jobs - it protects fat wallets. The small Florida town I grew up in lost hundreds of jobs - the excuse?

Sugar mill closes; trade pacts blamed

PAHOKEE, Fla. (AP) - The old sugar mill rises like a rusty tin mirage from endless green fields of freshly cut cane and swaths of rich, black soil. A sweet, musty smell hangs heavy in the air as white steam pours from its smokestacks for the last time.

The Bryant Sugar House has ground more than 90 million tons of cane into about 20 billion pounds of raw sugar since it opened in 1962. On Wednesday, the plant wrapped up its 45th harvest season and prepared to close forever following the industry trend -- falling prices and better technology that means fewer jobs as more mills turn to automation and computers.

Faced with growing pressure from foreign sugar, U.S. Sugar Corp., the nation's largest producer of cane sugar, is combining the mill's operations with a high-tech plant 30 miles away. About 200 people will lose their jobs.

'We've had more and more trade agreements that continue to give away more access to our marketplace, creating a very, very competitive environment,' said Robert Coker, the company's vice president.

He said the company was forced to modernize one plant and consolidate operations, 'and unfortunately, when you modernize, it means eliminating jobs.'

Thirty-three mills across the country have closed in the last decade as producers try to remain competitive in a market becoming flush with excess foreign sugar, according to the American Sugar Alliance.

The $10-billion-a-year industry employs 146,000 people in the U.S. But trade agreements with other nations threaten even more American jobs as producers streamline their facilities to cut costs, the industry claims.

How convenient, trade pacts justified firing hundreds of people, a great many of them black and Latino, while the fat wallets still get to pad their pockets by virtue of a government giveaway.

Is it too difficult for Congress to insist that these fat cats use some of the money Congress gives them to keep Americans working?

Our government is broken. And small towns, populated with people who do not have millions for lobbyists, suffer:

Some of the 202 employees will go to work at U.S. Sugar's other plant. Some will retire. Many will simply move on. The company held a job fair. 'It's a sad day,' said 65-year-old mill manager Jacques Albert-Thenet. 'Some of these people have worked here an entire generation.'

Secretary Linda Stanley, 63, is one of only two employees who have worked at the plant since it opened in 1962. She has seen generations working side-by-side: 'Husbands, wives, sisters, children, brothers, nieces and nephews.'

Mill mechanic Jessie Brown Jr., 50, works alongside his two sons. He's been here 31 years and will soon head to the other mill for work.

'I'm going to have to do little adjusting. This is home,' Brown said. 'You gotta start all over again in a new place. Most of the people who are here now are your family.'

Not to worry. The fat cats will still get theirs -on the dole. The 1.5 billion dollar sugar fat cat dole.

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    Have you read (5.00 / 2) (#1)
    by Maryb2004 on Tue Oct 30, 2007 at 11:42:54 AM EST
    Robert Reich's new book Supercapitalism?    Many similar points to yours.

    No (5.00 / 1) (#2)
    by Big Tent Democrat on Tue Oct 30, 2007 at 11:45:33 AM EST
    But now I will.

    There is diary on this exact subject (5.00 / 1) (#5)
    by sarcastic unnamed one on Tue Oct 30, 2007 at 12:29:28 PM EST

    From what I've read, US producers are one of the lowest-cost producers in the world, however every sugar-producing nation has such a massive and byzantine web of sugar production corporate welfare (that effectively reduces the selling price of that country's sugar, both for export and local consumption) that it's nearly impossible to untangle.

    iow, most any sugar that can be imported for less than US producers sell it for, is because the country of origin has massive sugar corporate welfare programs. And they have their programs because we have ours. And we have ours because they have theirs. And so on.

    Our government is broken.
    Probably. Probably also in most other countries as well.

    What's the solution?

    The solution (none / 0) (#8)
    by Abdul Abulbul Amir on Tue Oct 30, 2007 at 01:17:14 PM EST

    The solution is simple.  STOP SCREWING THE CONSUMER.  Unfortunately, dumping this managed trade in favor of free trade is not likely in the cards.  

    The benefits of managed trade are concentrated in Florida, Hawaii, Louisiana, and the Red River valley area in the north.  Secondary beneficiaries are the corn growing states as corn syrup replaces sugar in much US production.  Almost all soft drinks in the US are sweetened with corn, whereas in the rest of the world its sugar.  The economic costs however are spread.  

    We all pay more for sugar.  The sugar consuming industries have adopted, mostly switching to corn based sweeteners or synthetics.  Those like hard candy makers that could not switch largely moved out of the country.  So "kdog" are you happy to pay more for sugar to see those blue collar hard candy jobs run out of the country?

    The ecological damage is also diffuse. It takes more land (with more agricultural run-off) and more soil erosion to produce a unit of sweetness from corn in Iowa that gets less sun and less warmth than it does to produce that same unit from sugar cane nearer the equator.  Killing the Gulf of Mexico at the mouth of the Mississippi is a price worth paying to keep the consumer paying more for sugar.  Right "kdog?"  

    This whole shabby business has nothing to do with capitalism or so called Super-Capitalism.  It is all about the politically powerful using the power of the state to direct benefits to their constituents.   Well, Big Tent you seem to be an opponent of free trade and a champion of managed trade.  So quit whining, you got what you want.


    How do "the politically powerful" (none / 0) (#10)
    by jondee on Tue Oct 30, 2007 at 01:30:21 PM EST
    get to be politically powerful, oh son of the prophet Milton?

    Of course it has nothing to do with industry working WITH "the power of the state" to rig the game to their advantage, right? Right.

    Those campaign coffers are all filled with money from the Teachers Union and the ACLU. Everybody knows that.


    How do they get to be polotically powerful? (none / 0) (#12)
    by Abdul Abulbul Amir on Tue Oct 30, 2007 at 02:51:45 PM EST

    You have to be kidding.  They get elected.  The elected office holders are politically powerful.  

    They get elected (none / 0) (#13)
    by jondee on Tue Oct 30, 2007 at 03:08:32 PM EST
    Atta boy!

    And h-o-o-o-w-w do they get elected? Do they have to get something, raise something, to help them get elected? And,if so, where does most of that something come from, and what do "the politically powerful" have to do to get it?


    No matter what (none / 0) (#15)
    by Abdul Abulbul Amir on Tue Oct 30, 2007 at 03:12:05 PM EST
    there will be 435 representatives and 100 senators.  They will write the rules of "managed" trade to suit their constituients.  Do you find that hard to understand?

    Do you find it hard (none / 0) (#17)
    by jondee on Tue Oct 30, 2007 at 03:41:47 PM EST
    to understand that the constiuents you're refering are,in large part,the ones most opposed to "mangaged trade"? Or is it your view that any "managment" (i.e., laws, regulations), whatsoever should be done  away with in order to free up certain entitiees to operate completely outside any restrictions whatsoever?

    This moral certitude (none / 0) (#18)
    by jondee on Tue Oct 30, 2007 at 03:58:12 PM EST
    ( or dosnt morality enter into it? ) about the pristine perfection of unrestricted "markets" rivals the faith of some medieval mystics in the working of   Divine Providence.

    Come to think of it (none / 0) (#20)
    by jondee on Tue Oct 30, 2007 at 04:07:15 PM EST
    Didnt freud connect the money fixation -- and by extension "markets" fixation, to a reaction to the "dirty", "impure", anal phase?

    Is zat so?? (none / 0) (#19)
    by Abdul Abulbul Amir on Tue Oct 30, 2007 at 04:05:16 PM EST

    ...the constiuents you're refering are,in large part,the ones most opposed to "mangaged trade"?

    Are you telling me that the steel makers and steel workers unions are opposed to restictions on steel imports, or the farm economy in Iowa is opposed to restrictions on ethanol or sugar imports?  Thats a hoot.


    let us not impede (none / 0) (#21)
    by jondee on Tue Oct 30, 2007 at 04:10:36 PM EST
    the unfolding and revealing of the Markets divine splendor in anyway.

    It's mysterious ways are not our ways.


    Right on. (none / 0) (#23)
    by Abdul Abulbul Amir on Tue Oct 30, 2007 at 07:05:23 PM EST

    Your ways are the corruption the Big Tent complains about.  You are welcome to them.

    And of course (none / 0) (#34)
    by jondee on Wed Oct 31, 2007 at 12:19:21 PM EST
    unrestricted markets can never be corrupt (how that is remains one of the divine mysteries of Faith).

    But maybe you could explain a little of it to us uninitiated, oh Son of the Profit.


    You cannot corrupt what you cannot influence. (none / 0) (#37)
    by Abdul Abulbul Amir on Thu Nov 01, 2007 at 01:32:34 PM EST

    You cannot corrupt what you do not influence.  Note the enviromental damage, job loss, screwed consumers, and bug bucks going to wealthy land owners due to sugar quotas.  Now compare to bananas.  No corruption, no job loss, no screwed consumers, etc.

    Tell that to the people (none / 0) (#38)
    by jondee on Thu Nov 01, 2007 at 01:37:14 PM EST
    in Guatamala, oh Son of the Profit.

    Exactly... (none / 0) (#39)
    by kdog on Thu Nov 01, 2007 at 01:43:23 PM EST
    bananas?  Thats the example of "the right way"?  Produce overseas and poison the child labor?

    Thanks but no thanks.


    Big Tent (none / 0) (#40)
    by Abdul Abulbul Amir on Thu Nov 01, 2007 at 03:28:29 PM EST

    Big Tent has shown the domestic corruption engendered by market rigging in sugar.  Is your complaint that bananas are bad because there is no domestic US corrtption?

    I'm saying.... (none / 0) (#41)
    by kdog on Thu Nov 01, 2007 at 03:49:40 PM EST
    maybe the reason children are being poisoned in Central America while picking our bananas is because there aren't enough trade restrictions.

    Look...maybe sugar is over-regulated, maybe bananas are under-regulated.  But to say there should be no regulations regarding trade (aka free trade) is a recipe for disaster.


    Managed trade.... (none / 0) (#11)
    by kdog on Tue Oct 30, 2007 at 02:20:01 PM EST
    made this country strong, as we swing towards "free trade" I see this country as a whole getting weaker, with 1% at the top getting stronger.

    Look at the dollar and tell me how well free trade is working out for us.  Then look at the trade deficit.  


    Managed trade (none / 0) (#14)
    by Abdul Abulbul Amir on Tue Oct 30, 2007 at 03:08:43 PM EST

    Managed trade drove the hard candy industry out of the country.  Managed trade put steel consuming industries at a disadvantage to foreign competitors.  BTW, there are about 10 jobs in steel using industries for each one in steel production.  Calling those kinds of results making the country strong is a joke.  But not very funny.

    Are you saying NAFTA... (none / 0) (#16)
    by kdog on Tue Oct 30, 2007 at 03:20:32 PM EST
    is working out well for America? Talk about a joke...

    Anarchy in the U.K (none / 0) (#36)
    by jondee on Wed Oct 31, 2007 at 04:31:39 PM EST
    Disbelieving in "managed trade" is just an obfuscationist way of saying market entities should be able to operate outside the rule of law, while (non-corporate) "persons" are all expected to live (hopefully) according to the rules of civilised society.

    Profit is it's own justification.


    kdog (none / 0) (#26)
    by jimakaPPJ on Tue Oct 30, 2007 at 09:06:44 PM EST
    A weak dollar makes our exports more competitive. Conversely, the PRC's continual depressing their currency vs the dollar makes their exports cheaper...

    The rub comes when you are paying for imports, such as oil. If the seller is basing their profits on the dollar, they have to increase their price to maintain the same level. Same with jeans from China, except China just absorbs the change.

    That's "managed free trade."  ;-)


    China is looking out for theirs.... (none / 0) (#29)
    by kdog on Wed Oct 31, 2007 at 08:03:07 AM EST
    by managing their trade and currency.

    I just think we should look out for ours more.


    Kdog (none / 0) (#31)
    by jimakaPPJ on Wed Oct 31, 2007 at 08:58:37 AM EST
    Actually I don't think China is looking out for "theirs." They are looking out for the political/managerial class which also includes some very rich people in and outside of China.

    I would actually buy a book that details their distribution system, etc.

    As for managed trade, we do it too. The question is always how much and to who.


    Thats what I meant.... (none / 0) (#32)
    by kdog on Wed Oct 31, 2007 at 09:19:23 AM EST
    China would never allow a "free trade" deal that jeapordizes the political/managerial class, the "theirs" they are concerned with.

    Silly me thinks America shouldn't allow "free trade" if it jeapordizes our overall economic and social well-being.  

    I agree we need to strike a balance between fair and free trade.  


    Thanks for the link (none / 0) (#9)
    by Big Tent Democrat on Tue Oct 30, 2007 at 01:29:02 PM EST
    Not True With Regard to Brazil (none / 0) (#25)
    by Randinho on Tue Oct 30, 2007 at 08:56:12 PM EST
    Brazil is one of the largest exporters of sugar and recently won a decision (along with Australia and Thailand) in the WTO against EU export subsidies for sugar.

    Other than a small subsidy in the Northeast of Brazil which hasn't been paid in years (see this PDF file from the USDA), Brazil has no sugar subsidies. From the same USDA report:

    During the 1990's Brazil's sugar export market was opened to private enterprise and sugar price controls were eliminated. By 1999 Government decreed producer prices for sugarcane were eliminated. The result of this liberalization, inefficient operators werewinnowed out and the industry restructured and consolidated.

    My father-in-law farms sugarcane in Brazil and has never received um centavo from the government to keep him in business.


    Fair point, especially as Brazil is, (none / 0) (#35)
    by sarcastic unnamed one on Wed Oct 31, 2007 at 01:07:08 PM EST
    by far, the biggest sugar producer in the world.

    An interesting snippet:

    Currently, U.S. policy protects sugar producers and processors from competition by limiting imports and excluding lower-cost producers from open access to the market. This keeps domestic sugar prices artificially high. However, 40 countries have been given preferential access to U.S. markets, including certain high-cost producers, such as a number of Caribbean countries.

    As EU reforms proceed, and as U.S. corn sweetener and sugar markets become more integrated with Mexico under NAFTA, the U.S. could come under pressure to change its sugar price support program. Potentially, the U.S. could end sugar subsidies and institute a buyout, as it has for peanut quotas and tobacco price supports. Restrictions on imports and domestic production could be relaxed and tariffs lowered. Although these changes would bring sugar prices down, their impact on developing countries would vary.

    More open global trade in sugar would benefit some poor African countries that are low-cost producers of sugar, including Malawi and Zimbabwe. Other countries, such as Mauritius and Swaziland, would be hurt economically due to loss of preferential market access.

    In order to be competitive in global sugar markets, developing countries would have to produce sugar efficiently and massively, meaning they would have to engage in large-scale, high-tech production, calling into question the opportunities for smallholder farmers. Nevertheless, it may be possible for small-scale sugar producers to organize themselves in cooperatives that could successfully compete.

    I just want my Coke to taste right (5.00 / 1) (#6)
    by andgarden on Tue Oct 30, 2007 at 12:37:00 PM EST
    at times other than Passover. Killing the corn subsidy would go some way toward that.

    Funny (1.00 / 0) (#22)
    by squeaky on Tue Oct 30, 2007 at 04:49:08 PM EST
    Hadn't thought that at passover classic coke is really, classic coke. I remember when they came up with that scam as a way to obscure their shift to using cornsyrup instead of sugar. No question that it was much better when they used sugar. The cornsyrup made it revolting.

    Actually, (none / 0) (#24)
    by andgarden on Tue Oct 30, 2007 at 07:38:22 PM EST
    they've been using an HFCS mix since the early 80s--before I was born and before New Coke.

    Yes (1.00 / 0) (#33)
    by squeaky on Wed Oct 31, 2007 at 12:03:27 PM EST
    I remember when it started tasting bad because of the switch to corn syrup. When classic coke came out I was hopeful that it would actually be classic coke, but it just turned out to be an ad scam.

    I always thought New Coke (none / 0) (#28)
    by Ben Masel on Wed Oct 31, 2007 at 02:00:14 AM EST
    was a way to do without the decocainized coca leaf.

    Foxes Guarding The Henhouse (1.00 / 0) (#3)
    by squeaky on Tue Oct 30, 2007 at 11:52:49 AM EST
    The workers are considered a social problem, and dealing with social problems is somehow considered socialist.

    Trickle down and let them eat cake.

    More from emptywheel:

    There's an interesting case study going on over at the Senate Commerce Committee. The Committee is trying to write legislation to return the Consumer Product Safety Commission to its former strength so it can prevent things like lead-filled toys from entering the toddler chew chain. Yet the Commission's acting head, Nancy Nord, is trying to preserve the Norquistian "ideal" of small government--she's objecting to Senate plans to give her Commission more money and other resources.


    Of course Nancy Nord background is in represented big business, not the consumer. No wonder she wants to desiccate her agency.

    Someone please explain to me (none / 0) (#7)
    by jondee on Tue Oct 30, 2007 at 12:37:00 PM EST
    why corprate welfare is never described as "socialism". Is it because along with letting "the market" determine business behavior and ethics, we have to let the market determine what ideas are acceptable?

    I think so.


    Ask the people.... (none / 0) (#4)
    by kdog on Tue Oct 30, 2007 at 12:29:19 PM EST
    if they want to save .20 a lb. on sugar or more good-paying blue collar jobs with benefits in their community....they'll take the jobs everytime.

    I know I don't need cheaper sugar, it's plenty cheap enough, and sun god knows my community could use more jobs outside of fast-food and retail.

    People are told to get off their asses and work (none / 0) (#27)
    by Dadler on Tue Oct 30, 2007 at 10:33:40 PM EST
    Because you have to earn it, because there is dignity in work, because society suffers when we aren't productive enough.  But business, employers, are never asked to HIRE people for these reasons.  You'd be considered crazy to hire more people simply because you could afford ot and in doing so were benefiting the community, while taking a hit in your own wallet.  Business is only asked to hire people in order to pay them as little as it can for as much work as it can get out of them.  That disconnect between what is good for society, the dignity of work, and what is good for the bottom line is THE core conflict between capitalism and society.  Only when those who have share more, and those who have not are allowed to work for a fair share of it, then we'll continue down the new Gilded Age path we're on.

    It's the old story of the labor union rep shown robots that, he is told by the company president, will soon replace all those annoying union workers on the assembly line.  The union rep looked at the company man and said: "Fine.  Now try to sell that robot a car."