LIHU’E — The competition has stiffened for the domestic sugar industry, with increased production inside and outside the United States pressuring what in Hawai’i seems to be a dying industry. Corn, sugarbeets and cane are grown to produce sugar all
LIHU’E — The competition has stiffened for the domestic sugar industry, with
increased production inside and outside the United States pressuring what in
Hawai’i seems to be a dying industry.
Corn, sugarbeets and cane are grown
to produce sugar all across the U.S. Having farmers in several different
districts offers some political clout, but also makes the American Sugar
Alliance share a common woe of record-low sugar prices.
The lowest price in
22 years (17 cents a pound, down from 22.6 cents in July 1999) is
attention-getting. The U.S. Department of Agriculture has responded by buying
domestic sugar from farmers, and now is offering them an option of leaving some
of the 2000 crop in the ground and instead accepting USDA sugar the agency will
acquire through purchase or forfeiture.
Officials say the payment-in-kind
program will save farmers and the government money, reduce a current oversupply
of sugar, and save the USDA the responsibility of managing large amounts of
sugar. Growers support the plan.
But more help is needed. If the USDA
doesn’t also buy additional domestic sugar, some farmers will have loans go
into forfeiture, said one Midwestern farmer.
At a U.S. Senate Agriculture
Committee hearing on sugar policy last week, Hawai’i U.S. Rep. Patsy Mink
(D-2nd District) was among those testifying. She said a swing in U.S. sugar
policy that would allow more international sugar into domestic markets would be
disastrous for Hawai’i and the industry across the nation.
The state’s
farmers are efficient while adhering to some of the strictest government
environmental controls of any country and state in the world. Meanwhile,
Brazil, today the world’s largest exporter of sugar, continues to allow
children to work in their fields, Mink told the committee.
Besides
increased domestic production, sugar’s plummeting prices have been caused by an
end-run around quotas on imports of imported sugar. Under the scheme, known as
“stuffed molasses,” molasses is brought in to the country, usually through
Canada, then separated into molasses and liquid sugar.
The liquid sugar is
then sold in the domestic market, undercutting American producers, say American
growers.
Domestic sugar is also worried about increased imports from Mexico
via provisions in the North American Free Trade Agreement (NAFTA), and by
American farmers increasing production with favorable growing conditions and
lack of profitable alternative crops.
Also, as foreign governments had been
reducing their subsidies of sugar growers in response to American unfair
competition complaints, that trend now appears to be reversing itself.
The
three remaining sugar plantations in the state are doing everything they can to
stay in business, from operating farm tours and proposing resort and ethanol
plant development on their properties, to exploring alternative
crops.
Federal and state governments are supportive of the importance of
continuing Hawai’i-grown sugar as a leading agricultural industry, offering
loans, bonds for new enterprises and continuing daily sugar operations, and
other farm aid.
U.S. Sen. Dan Inouye (D-Hawai’i) recently secured $7.2
million for Hawai’i plantations, to help offset a double-whammy of low sugar
prices and high shipping costs. Hawai’i sugar is shipped to California for
refining and packing, and the price growers like Amfac Sugar Kaua’i and Gay and
Robinson get for their sugar is only around 15 cents a pound. That is less than
their cost of production, Inouye said.
“On my recent trip back to Hawai’i,
I met with the sugar leadership, and they stressed their urgent need for relief
at least until sugar prices could be stabilized,” Inouye said. “I told them
that as long as they were willing to fight to continue to produce sugar in
Hawai’i, I would do all that I could to support them and their
employees.”
Inouye also secured $950,000 in federal funding for the Hawai’i
Agriculture Research Center, to maintain competitiveness of U.S. sugar, and to
support the expansion of new Hawai’i crops and products.
The funds are
included in the fiscal year 2001 Department of Agriculture, Rural Development,
Food and Drug Administration, and Related Agencies Appropriations Bill, which
is on its way to President Clinton.
The Hawai’i Agriculture Research Center
at ‘Aiea on O’ahu was formerly the Hawai’i Sugar Planters
Association.
“Many people in Hawai’i, including myself, are working to
ensure that agriculture remains a strong pillar of our islands’ economy,” said
Inouye.
At the same time, Inouye is seeking $200,000 in federal funds for
programs to create employment opportunities for people displaced by the closure
of sugar plantations in the state.
Business editor Paul C. Curtis can
be reached at 245-3681 (ext. 225) or pcurtis@pulitzer.net
