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Sugarbeet farmers on the trading block?
by Dan Gunderson, Minnesota Public Radio
December 5, 2003

Economic studies say the sugar industry has a $2 billion dollar economic impact in Minnesota and North Dakota. (MPR photo/Bob Reha)

American steel companies fear the elimination this week of foreign steel tariffs will flood the U-S with cheap imports. U.S. sugar producers say a pending trade agreement threatens their industry with the safe fate. Sugar production has an estimated $2 billion annual economic impact in Minnesota and North Dakota. Farmers fear the Central American Free Trade Agreement will flood the United States with cheap sugar.

Moorhead, Minn. — The Bush administration hopes to finalize the Central American Free Trade Agreement by the end of this year.

United States trade negotiators have indicated an interest in allowing more Central American Sugar into U.S. markets.

Sen. Byron Dorgan (D-ND) argues such an agreement is unacceptable.

"We will end up without a beet industry in this part of the country. We will end up without a sugar industry in this country at all. And that would be a devastating consequence," says Dorgan.

"The nuts and bolts of this thing are really there's 20,000 jobs in North Dakota and Minnesota and this has an annual impact of $2 billion." - American Crystal Sugar Chairman Bob Vivatson.

Sen. Dorgan believes Trade Representative Robert Zoellick is willing to sacrifice the U.S. sugar industry as a negotiating tool.

Dorgan says he's thinking of buying team jerseys for trade negotiators.

"They wear them in the Olympics and they look down and it says USA," he says. "I'd like a trade negotiator to look down from time to time and remember who they represent. Ambassador Zoelick represents us and our best interest and it is not under any circumstance in our best interest to negotiate away a vibrant industry like the sugar industry."

Dorgan is critical of what he calls deals made behind closed doors.

He says it may be difficult to stop CAFTA because fast track authority allows the President to approve trade deals without congressional input.

The U.S. sugar industry is protected by import tariffs on foreign sugar. That keeps the price higher for American producers. Domestic sugar is at 21-cents a pound compared to 6-cents a pound on the world market.

Farmers say removing the tariffs would allow much cheaper Central American sugar to flood the market.

U.S. farmers can't compete with subsidized sugar produced in Central America, according to American Crystal Sugar Company President Jim Horvath.

"If we are in a marketplace that is unsubsidized throughout the world we believe we have every chance to succeed. We are a competitive industry. But if we unilaterally disarm on this issue, country by country or region by region, we cannot survive this situation," says Horvath.

Farmers grow sugarbeets all across western Minnesota and eastern North Dakota. It's among the largest sugar producing regions in the country.

Bob Vivatson, who raises sugarbeets near Cavalier, ND, is American Crystal Sugar Company Board Chairman. Vivatson says the sugar industry is a significant part of the regional economy.

"The nuts and bolts of this thing are really there's 20,000 jobs in North Dakota and Minnesota and this has an annual impact of $2 billion," says Vivatson. "And that rolls down through every mainstreet in rural North Dakota and rural Minnesota. And that's why we're persuing this with a passion because we just cannot sacrifice this industry."

There's bipartisan support for protecting the sugar industry. U-S Sen. Norm Coleman (R-MN) says he supports free trade, but only if it's fair. Coleman believes sugar should be an issue for the World Trade organization. He says it's a mistake to negotiate regional agricultural agreements.

"If we do CAFTA, what about Latin America and on and on. So it really needs to be dealt with in a global context. It's important to know the Bush administration understands that. So I am hopeful in the end the right thing will be done for America. Not just for the sugar industry here, but for America," says Coleman.

U.S. trade negotiators have indicated they are committed to using sugar as a bargaining chip in the CAFTA negotiations.

Sugar industry officials and their Congressional supporters say they will fight to protect U-S producers.

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