Sugarcane is for sugarcane
In 1922, Louisiana’s sugarcane growers and millers were faced with a difficult decision: change or die. Faced with disease and decreasing sugar yields, the sugar industry consolidated three groups, the Louisiana Sugar Planters Association, American Cane Growers Association, and the Producers and Manufacturers’ Protective Organization into one group dubbed the American Sugar Cane League.
Their top priority was to introduce new varieties of cane to Louisiana. They were largely successful.
The Nov. 2, 1924 Times-Picayune reported that Governor Henry Fuqua invited national and state politicians and industry leaders to Southdown Plantation near Houma to learn about the new "varieties of sugarcane (developed) by specialists of the United States Department of Agriculture, working in cooperation with the cane growers of Louisiana, Florida and Georgia. They (the new varieties) are disease and cold resistant and will enable the extension of the sugar belt 100 miles northward.”
The Louisiana sugarcane industry knew the best way to continue its long tradition of growing sugarcane was to focus on research, be more efficient and have a strong trade group manage the growers’ and millers’ political interests as well.
By 1927, the July 26 Morning Advocate reported that developed new varieties had "shown such favorable performances in comparison with the varieties formerly used that the rehabilitation of the industry is practically assured.”
But the Louisiana sugarcane industry was not home free. Commodities like sugar will always be the target of special interests who want to get the best price for their purchases. Conversely, commodity groups like sugarcane, rice, cotton and corn work to make sure they are treated fairly in the marketplace and receive a sustaineable price for their product.
Threats to important commodity food industries come from a variety of sources. On the surface, the North American Free Trade Agreement should have been a "win-win” deal for many commodity groups. As it relates to the sugar industry, Mexico would be allowed to send as much sugar into the inventory-managed Unites States market as they wanted. In return, American commodity groups would be able to freely send goods like corn and other products into Mexico duty-free.
The Louisiana sugar industry expected the Mexican sugar industry to be mindful of the USDA’s inventory-managed system which helps to maintain prices high enough to keep American sugar farmers in the fields.
Under the terms of NAFTA, Mexico can export as much sugar into the U.S. market as they want. In 2013, the American market could have absorbed up to 750,000 tons of Mexican sugar without the price being adversely affected. However, the Mexican industry shipped more than 2.1 million tons of sugar to our shores.
The damage to the American market was severe. First, American sugar prices plummeted to prices not seen since the 1980s. When sugar price dropped to below the 20.5 cents range, provisions in the Farm Bill kicked in and the USDA was obliged to buy $278 million worth of sugar and take it out of the food supply. So the Mexican action not only affected the price we received for our sugar, but the American taxpayer had to foot the $278 million bill to help stabilized the domestic sugar market.
The Mexican government owns one-fifth of their sugar industry and will prop up a failing sugar mill to keep it from going out of business. In the U.S., government will simply allow an inefficient mill to go out of business.
We don’t have any inefficient mills in Louisiana and the harvest statistics back that up. The 2012 Louisiana crop, at 1.7 million tons of raw sugar, was worth nearly $1 billion. The 2013 crop was almost as good at 1.5 million tons of raw sugar, but its value dropped more than 25 percent to only $750 million. A drop of more than $250 million in value is simply too severe to chalk up to a volatile market.
For these reasons, the American sugar industry filed antidumping and countervailing duty petitions April 4 with the U.S. International Trade Commission and U.S. Department of Commerce charging that the Mexican industry shipped sugar to the United States at dumping margins of 40 percent or more while receiving substantial subsidies from Mexican federal and state governments.
Back in 1922, the Louisiana sugar industry saw a need to change its approach to farming to save the industry. Those growers back then instilled in their descendants a deep understanding of how to maintain their industry and their way of life. Today, our growers and millers continue to fight the good fight to preserve our traditions, our farming heritage and our agricultural way of life. We will do everything possible fight any adversary that threatens it. We are united and we stand firm.