A Bitter Pill for Sugar Beet Farmers

Powerful Lobby Takes Aim at President Bush's Proposed Trade Pact

NAMPA, Idaho -- Dressed for work in the fields, sporting a baseball cap emblazoned with a seed company logo, Steve Martineau does not come across as a fellow in league with a powerful Washington lobby. Nor does he think of himself that way.

"We don't feel we're cutting a fat hog here," said Martineau, who with his son farms about 900 acres of land near the Snake River and Owyhee mountain range. "If we were, I'd have a whole lot nicer bunch of tractors."

Appearances notwithstanding, the 55-year-old Martineau is part of one of the most formidable political forces in American agriculture, because he grows sugar beets, a vegetable that yields about half of the sugar produced in the United States.

The sugar industry's practice of contributing generously to politicians of both parties has helped ensure the continuation of a federal program that for decades has strictly limited sugar imports. Thanks to those restrictions, U.S. sugar prices are more than twice the world market level. The sugar industry's clout now looms larger than ever, because it is shaping up as a potential spoiler for President Bush's hopes of lowering trade barriers with America's neighbors and other nations around the globe.

The industry is using its muscle against Bush's top trade priority this year, the Central American Free Trade Agreement, which would create a NAFTA-like free trade zone between the United States and five Central American countries plus the Dominican Republic.

Although CAFTA contains special provisions for sugar that no other sector gets -- it would allow the Central Americans and Dominicans to increase their sugar shipments to the United States by only a small percentage of overall U.S. consumption -- growers fear even that would be enough to drive sugar prices sharply lower.

That poses an acute problem for the White House in getting CAFTA through Congress.

Democrats, especially in the House, overwhelmingly oppose the agreement, mainly because of objections from labor unions that it fails to protect the rights of low-paid workers in Central America who would be competing more directly with American workers. That means the deal needs almost unanimous support from Republicans. But a number of conservatives who have backed Bush on trade in the past are abandoning him on CAFTA because they hail from states where sugar beets and sugar cane are grown.

Nowhere is the White House's sugar problem more glaring than here in Idaho, where both senators and both House members -- GOP stalwarts all -- have declared themselves in the anti-CAFTA camp. The state's junior senator, Michael D. Crapo, sits on the Senate Finance Committee, which has jurisdiction over the accord, as do several other senators from nearby sugar beet-producing states, raising doubts about whether a majority vote in favor can be mustered on the normally pro-trade panel.

"The members of Idaho's congressional delegation deserve a thankful pat on the back" for their stance on CAFTA, wrote Ralph C. Burton, president of Amalgamated Sugar Co., a grower-owned cooperative, in the Idaho Statesman a few months ago. He cited a University of Idaho study estimating that sugar has created about 7,000 jobs in the state, which has a population of about 1.3 million.

More is at stake than CAFTA itself. Congress's failure to approve CAFTA could deal a major setback to bigger trade accords that Bush hopes to finalize in coming years, because it would arouse alarm overseas that the United States was turning protectionist and that the administration could not win congressional backing for the deals it strikes. Among the pacts potentially endangered by a CAFTA defeat is the World Trade Organization's Doha round, which is aimed at reducing tariffs and other impediments to commerce among the WTO's 148 member nations.

As a result, supporters of free-trade agreements are in a lather over the possibility that sugar, which accounts for less than 1 percent of all cropland harvested, might play such a critical role in trade policy.