Sugar Cane Growers Say NAFTA Is No Sweet Deal

Influx of Mexican sugar, sweeteners may destroy US industry

HERE in the heart of Louisiana's vast sugar cane country good words can be heard on the annual crop yield, weather conditions, and the prices that mills and refineries are willing to pay for the cane, which may reach 25 cents a pound this year.

But when the conversation turns to what many here call "the treaty," or more pointedly "the sell out," then the normally amiable faces of the mostly Cajun farmers and growers of this region become serious.

As Congress gears up to consider the North American Free Trade Agreement (NAFTA) - designed to minimize trade barriers between Canada, the United States, and Mexico - the people who make their living working Louisiana's most durable crop still need to be convinced.

"It is something that all of us are very concerned and worried about," says Charles Melancon, a cane grower who is also president of the American Sugar Cane League. "The way it is worded right now, this treaty could virtually destroy our industry in favor of the corn syrup producers in Mexico.... We've got to change this thing before it kills us."

Larry Collins, the director of Louisiana's international trade department, agrees: "How often can just one act have such wide-ranging impact on an entire American industry, to the point of maybe wiping it out? That's what NAFTA could do to the sugar farmers of our country, and that's why you're going to see them fight it to the end."

At issue is the goal and purpose of the treaty. By abolishing tariff and nontariff barriers between the three countries, NAFTA will knock away an elaborate system of federal price support and import quotas that have allowed the US sugar industry to grow into a $20-billion-a-year business employing more than 360,000 people.

Under current federal law, sugar growers in the US are protected from Mexican competition through two tariffs.

* A pro-rated quota among about 39 nations that keeps sugar imports to this country at a minimum. For example, in 1992 Mexico's sugar quota stood at only 8,001 tons, an infinitesimal amount next to the more than 200,000 tons the US exported to Mexico that same year.

* A federal trade provision authorizing the government to impose extra fees and quotas on any foreign agricultural product seen as a threat to US farmers.

UNDER NAFTA's proposed changes, Mexico could start exporting up to 150,000 tons of sugar into the US on a yearly basis by the end of this decade, while the controversial trade provision would be phased out over a 10-year period.

US sugar growers are already worried about the infusion of fructose corn sweeteners in their market: Since the late 1970s, such sweeteners have gone from making up less than 5 percent of all US cold drink products to more than 52 percent today. NAFTA could accelerate those trends. "You could have a company like Coca-Cola doing most of its bottling in Mexico with corn sweeteners, and then flooding the market up here and ruining our business," Mr. Melancon says.

Louisiana Sen. John Breaux (D), who says he is generally in favor of NAFTA, is also worried about the treaty's sugar implications, but for another reason. "If a country becomes a surplus producer of a product they can export that product to the US without any duties. The provisions of the treaty allow Mexico to become a surplus producer of sugar just by producing one more packet of sugar than we do," he says. "We have to get that corrected."

In Louisiana, sugar growers may be more hostile to NAFTA's ramifications because their industry has been so hard hit in recent years. In 1989 a Christmas freeze wiped out up to 50 percent of the crop. Heavy rains in 1991 washed away more than a quarter of the growers' business. Then Hurricane Andrew last year resulted in a 1993 crop that is nearly 20 percent smaller than expected.

For all the industry's problems, some economic experts say NAFTA could be good for the sugar producers. "They are going to face trouble because they no longer know how to compete," says Rafiq Ahmed, a professor of economics at Tulane University in New Orleans. "That's what happens to any industry when it is protected too much by artificial barriers.... What they should be doing now is thinking about new technologies, new marketing methods, instead of blaming all of their troubles on NAFTA."

In a state, though, where the number of sugar cane farms has dropped from more than 2,300 in 1963 to about 750 today and the number of sugar mills has been cut in half to 20, such sentiments are not widespread. "We're in an industry that has gotten it from all sides," Melancon says. "Which is why we're fighting back. We're going to join up with the labor unions and environmentalists on this thing.... For us NAFTA is just one bad deal."

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