Sugar industry would wither without big government

Sugar cane field by Shutterstock.com

Article Highlights

  • Florida sugar cane is an industry literally built on big government, and growers know it will wither in a free market.

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  • Florida’s sugar cane industry was born as a heavy-handed almost radical experiment by federal and state government.

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  • Last fiscal year, Americans paid about 69.9 cents/lb of refined sugar. The world price was less than 27.8 cents.

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SOUTH BAY, Fla. -- From a distance it looks as if tornadoes are churning in the fields. But as you get closer, you see that the dark plumes are clouds of black smoke. And if your smell is keen enough, you realize it's sugar cane that's burning.

Trucks hauling trailers full of cane stalks crowd the northbound lanes of Route 27 for a stretch just south of Lake Okeechobee. In the southbound lanes the trailers are empty. They're running between the cane fields that dominate this northernmost part of the Everglades and the Okeelanta sugar mill, owned by the Fanjul family.

The Fanjuls are the most important family in the Okeechobee area. Sugar is easily the most important industry. So it's no wonder that folks here are protective of the federal programs that prop up the industry at the expense of its customers.

"I'm not supportive of that NAFTA business," sugar farmer James Dickson tells me over a Miller Lite at Tiki Bar, on the shore of Okeechobee in Clewiston, Fla. By "that NAFTA business," Dickson is speaking generally about free trade. Dickson supports, without apology, current federal restrictions on importing sugar.

By reducing supply, these restrictions drive up the price that Dickson's Enterprises receives for each pound of refined sugar. Last fiscal year, Americans paid about 69.9 cents per pound of refined sugar. The world price was less than 27.8 cents.

How to justify such punishing protectionism? "Go down to Brazil," Dickson says. "Check out the working conditions." Brazil's labor costs are much lower, and so are its environmental regulations. "They do stuff to their sugar we would never do."

Florida Sen. Marco Rubio has a similar defense: Brazil subsidizes its sugar, and so if we allow sugar imports, Rubio said last summer on CNBC, "You're going to wipe out your agricultural industry."

You hear these arguments to justify any sort of protectionism. There's some validity to the view that an existing industry is worth protecting from rapid upheaval.

But this is a bit rich coming from Florida's sugar cane industry, which was born as a heavy-handed, almost radical experiment by federal and state government, and which has always relied on big government for profit.

Drive through a cane field, and you'll see why sugar growers cluster around Okeechobee: A series of man-made canals, built by Florida's progressive governor Napoleon Bonaparte Broward before World War I and later maintained and expanded by the Army Corps of Engineers, drain this portion of the Everglades in order to make it arable. They also provide irrigation.

Without the massive government effort that transformed the ecosystem of this giant swamp, there would be little or no Florida cane.

The federal government also made it possible for the industry to get cheap labor from the Bahamas and Jamaica. Through the British West Indies program, which was created during the Great Depression, "the United States government played a direct role in negotiating employment contracts for offshore laborers," explained Everglades historian David McCally. Uncle Sam even paid to ferry cane-cutters from the islands to Florida.

The guest-worker program put in place exploitative pay levels and work rules. For its part, Florida helped the industry by making it difficult or even illegal for cane cutters to quit. One farmer, lobbying the USDA against allowing Puerto Rican cutters, explained his reason: "Labor transported from the Bahama Islands can be deported and sent home, if it does not work, which cannot be done in the instance of labor from domestic United States or Puerto Rico."

Cane is no longer cut by hand. Field workers burn off the leaves -- producing the columns of black smoke -- and tractors are used to gather the stalks and put them on trucks. But Dickson remembers the days of hiring Caribbean workers. "You would check them out like they were cattle," he said. "You would look at their hands. You would make them take off their shirt."

Without the Army Corps of Engineers' dredging and building, the cane growers wouldn't have the soil or the irrigation they need. Without Washington's decades of rigging the labor market, the companies wouldn't have had the workers they needed before mechanization. Now the industry says it deserves to be protected from foreign competition. And the growers are putting their profits behind the fight.

Sugar mogul Pepe Fanjul has been hosting fundraisers for Rubio since he entered the 2010 Senate race as a heavy underdog. Dickson has given $6,800 to the Florida Sugar Cane League, which hires former staff from the USDA and congressional agriculture committees to lobby to preserve the sugar program.

Florida sugar cane is an industry literally built on big government, and growers know it will wither in a free market.

Timothy P.Carney, The Examiner's senior political columnist, can be contacted at tcarney@washingtonexaminer.com. His column appears Monday and Thursday, and his stories and blog posts appear on washingtonexaminer.com.

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About the Author

 

Timothy P.
Carney
  • Timothy P. Carney helps direct AEI’s Culture of Competition Project, which examines barriers to competition in all areas of American life, from the economy to the world of ideas. Carney has over a decade of experience as a journalist covering the intersection of politics and economics. His work at AEI focuses on how to reinvigorate a competitive culture in America in which all can reap the benefits of a fair economy.


     


    Follow Timothy Carney on Twitter.

  • Email: timothy.carney@aei.org

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