Sugar’s woes are nationwide

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.


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


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.


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


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


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


“Many people in Hawai’i, including myself, are working to

ensure that agriculture remains a strong pillar of our islands’ economy,” said


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


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