Better Beet Seed.
         Better Revenue.

By: Pembroke Rathbone, The Idaho Statesman 

Everyone harps about farm subsidies - and sugar, in particular - with little understanding.

Sugar is a foreign aid program and an America Last agricultural program at best. There are 41 foreign countries that have quotas to deliver sugar into our market. They love the program, as they know exactly the tonnage they can deliver and at what price.

Even Canada has a quota for delivery to the U.S. market. They have virtually no domestic sugar industry. Their only domestic production is a medium-sized mill in Tabor, Alberta. The rest of Canada's sugar is refined in mills in Vancouver, Montreal, and Toronto. They contract for offshore sugar, refine it and fill their quota for the American dollar. Mexico has free access to our market.

Domestic sugar producers in the United States also have a quota. The Amalgamated Sugar Company has a quota of 18.9 million hundredweight. We have the capability to produce over 20 million bags, but if we produce one bag over our marketing quota, we stick it in a warehouse and pay storage on it. Before Hurricane Katrina hit the Gulf Coast, we had 4 million bags of sugar in a warehouse that we weren't allowed to sell. Luckily, we were allowed to sell that sugar after the hurricane knocked out two Gulf Coast refineries. Ordinarily, the only way we can sell our surplus sugar is if another sugar beet company has a shortfall. Under the law, surplus beet sugar cannot fill a deficit from cane production.

Domestic producers are able to put their sugar under loan to the Commodity Credit Corporation. When the Amalgamated Sugar Company makes a bag of sugar, a loan is taken out; when that bag of sugar is sold, the loan is paid back with interest. Under current law, the loan rate for refined beet sugar is $22.90 a hundredweight. That loan rate has been in effect since 1985.

Since that time, our production costs have skyrocketed. If the wholesale price of sugar dropped to the loan rate and stayed there, it would be the end of the domestic industry. If this were to happen, we would be at the mercy of the foreign producers.

The domestic producers are supposed to have 85 percent of the market. That is wonderful if consumption increases, but if consumption decreases, our marketing quotas gets cut- not the quotas of foreign holders. Truly, we should be allowed 100 percent of our market if we can fill it.

Our factories are designed to run at 100 percent of capacity. When they operate at less than 100 percent, the grower-owners suffer with higher per unit costs of production. The program is supposed to operate at no cost to the taxpayer and provide a stable supply of sugar at a reasonable price to the consumer.

Now, if you want to get worked up about subsidies, we can talk about huge payments to absentee landlords for program crops such as corn, wheat, cotton and soybeans. How about the taxpayers putting center pivots on farms under the guise of soil and water conservation? Now that might be worth getting excited about.

I hope this sheds a little light on the domestic sugar industry and our America Last sugar policy. Given a chance, we could be self-sufficient in the production of sucrose and provide good paying jobs to American workers.

Pembroke (P. T.) Rathbone of Marsing is the former director of the Snake River Sugar Company, Boise, and former director and officer of the American sugar beet Growers Association, Washington, D.C.