Johanns Focuses On Sugar Program At Farmfest Forum
By Andera Johnson, Farm & Ranch Guide

REDWOOD FALLS, Minn. - While he hasn't announced his answer to ongoing concerns by the U.S. sugar industry, Secretary of Agriculture Mike Johanns is looking for cooperation from the sugar industry.

Johanns recently took part in press conferences and a Farm Bill Forum on Aug. 3 held during Farmfest, during which he made several references to the sugar program. "We had a little disagreement on CAFTA regarding the sugar issue," said Johanns, adding that his home state of Nebraska raises sugarbeets and farmers operate a processing plant near Scottsbluff. "I don't believe there is enough sugar in CAFTA isolated that really makes a difference. We will have more variance each year in the production of sugar than is allowed to be brought in relative to CAFTA."

Of greater concern to the sugar industry is NAFTA, said Johanns - that NAFTA provisions are lowering tariffs and allowing more sugar to enter the United States. Johanns said that in compromise for passing CAFTA, USDA has agreed in writing to hold the sugar industry harmless from CAFTA and NAFTA.

"Time will tell whether that is necessary, it's very possible. We have a trigger under the farm bill where so much sugar can be imported - 1.532 million tons," said Johanns. "The whole idea is we can go up to that level without impacting the 2002 farm bill."

He said that if additional sugar were imported to the U.S. via these agreements, USDA would purchase that sugar under a Commodity Credit Corporation provision and sell it to the ethanol marketplace.

"I can say that for the life of the Farm Bill, both CAFTA and NAFTA, the sugar industry is held harmless under that agreement," said Johanns.

Johanns added that one of the reasons he was holding Farm Bill listening sessions was to figure out how sugar should be treated in the 2007 Farm Bill.

"It is about where we go from here," said Congressman Gil Gutknecht, who accompanied Johanns to Farmfest. "If we don't have a tariff-rate quota system, then what do we substitute for that in an environment where the dollars may be shrinking for everybody?"

Johanns said his role for the next Farm Bill is to work with the House and Senate to get good farm policy.

"It is very possible that, at some point in these listening sessions, we will come to a firm conclusion on the Administration's side that we should put ahead a specific legislative proposal," said Johanns, not referring specifically to the sugar program.

Johanns was very interested in the comments of Mark Olson, a sugarbeet farmer from Willmar, Minn., and also a shareholder and director of the Southern Minnesota Beet Sugar Cooperative. Olson pointed out that current restrictions within the sugar program limit growth within the cooperative, "stagnation of innovation, and a downward spiral in farm income."

"We agree with much of the sugar industry - the sugar program has worked well for us in the past; however, we do not agree that continuation of the current sugar program is necessarily the right path for the future," said Olson. "Promises of trade protection are an illusion - we know there will be continuing pressure for trade liberalization - no matter what party is in office." Olson added that the U.S. market is being oversupplied with imports of products that contain sugar.

"Food manufacturers use dump world price market sugar to blend in with food products that are shipped into the U.S. - entirely outside of the sugar program's fair trade quota," said Olson. He said the amount of sugar now entering the United States in this manner displaces the production of six mid-size sugarbeet factories.

"The only way to address the resulting problems is in the WTO - not in bilateral trade agreements," said Olson. "The sugar program used to work, but is not likely to work in the future."

Johanns immediately said that he found Olson's comments enormously thoughtful. Later in a press conference after the Farm Bill Forum, Johanns again spoke of Olson's comments. "We've had a real debate about CAFTA, sugar and its impact," said Johanns. "I thought an enormously telling moment was when we had a gentlemen (Mark Olson) talk about the future of that industry in a way that was so thoughtful and how does this industry grow and where does it go from here."

According to a DTN news report dated Aug. 10, 2005, Ken Roberts, the associate administrator of USDA's Foreign Agriculture Service, told Idaho sugar growers on Aug. 8 they should consider using the next Farm Bill to seek a change in their program. The news report said sugar is the only U.S. farm program that still relies on quotas and tariffs on imports to maintain price levels rather than government-paid supports.

But Chuck Steiner, a farmer and sugarbeet grower with Minn-Dak Farmers Co-op, of Wahpeton, N.D., said the current sugar program remains viable and important.

"We are lined up behind subsidized foreign producers to supply our own market," said Steiner. "Trade agreements like WTO and NAFTA guarantee access to foreign producers - whether we need the sugar or not.

"The no-cost U.S. sugar policy is working and should be allowed to continue in the next farm bill," said Steiner. "Trade agreements should not take away the American sugar farmer's ability to exist."