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Sugar Program Vital to U.S. Farmers Under Fire

March 18, 1990

WASHINGTON (AP) _ Minnesota farmer Owen Gustafson has little in common with the ambassador of Belize, but they agree on one thing: the U.S. sugar program is encouraging Latin American peasants to grow illegal drugs.

Gustafson, a corn and wheat grower from Montevideo, Minn., told a House committee last week that Belize became the world’s fourth largest exporter of marijuana after its U.S. sugar exports were cut by 75 percent.

″The loss of a market place due to the U.S. sugar program pushed people into drug trafficking,″ Gustafson said.

The tiny Central American country is one of several sugar-producing nations from Mexico to Argentina that is lobbying Congress to loosen the import quotas that help prop up prices for U.S. sugar growers.

Complaints about the import quotas are a key part of this year’s debate about renewing the 8-year-old sugar program, one of the most controversial components of American farm policy.

The program is the bread and butter of many farmers in eastern North Dakota and western Minnesota, who grow 40 percent of U.S. sugar beets.

The program guarantees a minimum price for sugar that works out to 18 cents per pound for sugar from cane and 21.5 cents per pound for beet sugar. The Bush administration has proposed to leave the sugar program alone in the 1990 farm bill.

However, the administration has raised the ire of sugar producers by proposing to replace the import quotas with tariffs because of rulings under the General Agreement on Tariffs and Trade that the quota system is unfair.

Sugar growers want the administration to leave the quotas alone and are asking Congress to raise the minimum price that farmers are paid.

″The sugar program is a farm program. It is not a foreign aid program,″ Ronald Hayes, president of Moorhead, Minn.-based American Crystal Sugar Co., said in testimony before a House Agriculture subcommittee.

″Its primary function is to insulate U.S. sugar producers as well as consumers from the unfair, undependable and unstable world ... sugar market,″ Hayes said.

But Belize and other countries say the import quotas have stymied their efforts at economic development and democratization.

Several sugar mills in the 14 Caribbean and Central American sugar-growing countries have been closed down because the U.S. quota has been cut in half over the past five years - from 1.1 million to 570,000 tons, said Belize Ambassador Edward Laing.

The Group of Latin American and Caribbean Sugar Exporting Countries - an organization of 22 countries that accounts for 45 percent of world sugar exports - claims its U.S. shipments fell from 3.2 million tons in 1981 to 950,000 in 1988.

″It is a fact that until our sugar situation is stabilized, it will be impossible to achieve economic growth and social stability in the ... region,″ Laing said.

But the American Sugarbeet Growers Association proposed Congress boost the minimum price to 20 cents per pound and require the administration to raise the price further to keep up with future increases in production costs.

The association’s president, Patrick Mahar, said world sugar prices ranged from 2.7 cents to 41 cents per pound during the 1980s.

However, the Sweetener Users Association, an industry group, claims consumers are paying artificially high prices for sugar.

Production of sugar cane and beets increased from 6.2 million tons in 1981 to 7.1 million tons in 1988, according to the group, which maintains that U.S. farmers have been encouraged to grow too much sugar.

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