Sugar Farmers Back Fair Trade, But:

Published online: Jun 07, 1999
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FRUSTRATION OVER CURRENT TRADE AGREEMENTS CITED

ST. PAUL, MN - Beet sugar farmer Sheldon Melberg, from Hector, Minnesota, testified at a hearing today on the upcoming World Trade Organization (WTO) negotiations, pointing out that U.S. sugar farmers have been on record in support of fair trade, but are "rightfully frustrated and skeptical about how current trade agreements have been negotiated and performed."

Melberg, who spoke on behalf of the 3,700 farm families who raise more than 700,000 acres of sugarbeets in Minnesota and North Dakota, said, "We are the most efficient producers of beet sugar in the world and lower cost than most of the cane sugar produced in the world. This is why we have gone on record to support trade agreements we believed would provide fairer trade."

However, he said the frustration and skepticism has arisen for several reasons. For instance, almost three-quarters f all sugar produced in the world is produced in countries that are either not members of the WTO (such as China and Russia), or they are developing countries that have received "special and differential treatment" that essentially exempts them from any reform commitments.

He went on to say that many countries allow "deplorable labor and environmental conditions" that are outlawed in the United States. The Brazilian sugar industry is cited by the U.S. State Department as using child and forced labor in their cane fields, he said.

In the developed world, U.S. competitors in sugar are the EU and Australia. The EU has internal price supports 30 percent higher than in the U.S. and uses massive export subsidies. Australia maintains a marketing monopoly and provides subsidies for its sugar industry's infrastructure.

Melberg said, "The failure of the Uruguay Round to address these problems or enforce the rules has contributed to the current collapse of world sugar prices, which are well below any producer's cost of production."

He said, "Our skepticism is further reinforced by Mexico's efforts to deny its side letter commitments in the NAFTA, and the Administration's two-year-long delay in addressing a creative and blatant circumvention of the tariff rate quota (by Canada) with a product known as stuffed molasses."

Melberg warned that for the U.S. sugar industry to support future agricultural negotiations, trade representatives must use an "approach that recognizes that industries and markets are different, with diverse characteristics and sensitivities.Experience has shown that using a `formula' or `one-size-fits-all' approach in trade negotiations will not be an acceptable method."

The two most important issues to be addressed, Melberg said, are the "elimination of export subsidies and state trading monopolies." He said, "Eliminating export subsidies should increase world prices and reduce the need to maintain high tariffs as a response to these predatory export subsidies."

In citing the importance of the sugar and corn sweetener industries to Minnesota and North Dakota, Melberg said they generate almost $3 billion in economic activity annually in the two states. "We provide a reliable supply of this essential food ingredient to consumers and the major food manufacturers in the Midwest at prices 32 percent below the average paid by consumers in other developed countries. We do all of this as no cost to the American taxpayer."

For More Information Contact:

American Crystal Sugar Kevin Price 218-236-4407

Minni-Dak Farmers Cooperative Jack Lacey 218-458-2413

Red River Valley Sugarbeet Growers Assoc. Mark Weber 701-239-4151

Southern Minnesota Beet Sugar Cooperative Sheldon Melberg 320-848-2784