Louisiana: A Protected Industry Still Faces Tough Times

By Shawn Donnan, The Financial Times

 Louisiana sugarcane field during harvest (Photo by Louisiana Farm Bureau)

Louisiana sugarcane field during harvest (Photo by Louisiana Farm Bureau)

Down in the cane growing areas of Louisiana, where farmers began harvesting sugar cane in the 1790s, the industry is preparing for its 223rd consecutive crop.

“It’s a crucial part of our history, our heritage and our economy,” says Jim Simon, general manager of the American Sugar Cane League, which represents Louisiana cane growers. But Louisiana’s sugar industry is also in decline.

When Mr Simon took over as general manager of the organisation in 2004, the state had 17 sugar mills and 750 cane farming families. Now it is down to 11 mills and 450 families.

That points to a peculiar paradox. US sugar farmers and producers have long been considered one of the biggest beneficiaries of political connections and trade protection. Besides restrictions on imports, Washington sets a floor price for sugar, guarantees loans and operates a production quota system that makes it hard for new domestic producers to enter the market.

But across the industry — from sugar beet growers in the Midwest to the cane fields of Louisiana — industry leaders complain of tough times. One factor, especially in sugar beet country where many farmers rely on multiple crops, is the fall of other commodity prices. Still, Mr Simon and others also blame Mexico and what he sees as other unfair competition.

The latest dispute with Mexico has nothing to do with broader debates about sugar policy or the looming renegotiation of NAFTA, they argue. It is simply about enforcing their victory in a 2014 anti-dumping case.

“Our farmers and millers can compete with any farm or mill in the world,” Mr Simon says. “But we can’t compete against their governments and we are not going to sit idly by and not [use] the laws that are put in place to protect.”

(Excerpted from a Financial Times article titled "Wilbur Ross and the sugar barons: How a Mexican trade deal got sticky".)