Sugar Industry Expands Influence

By Dan Morgan
Special to The Washington Post
Saturday, November 3, 2007

When U.S. sugar farmers needed help this summer defending a $1 billion, 10-year subsidy plan in a new House farm bill, they found it in some surprising places.

Among the 282 lawmakers siding with Midwest and Gulf Coast growers on a key vote was Rep. Carolyn B. Maloney (D-N.Y.), who represents Queens and Manhattan's East Side. The only sugar refinery in the New York area is well outside her district.

Four days after she voted against a measure that would have derailed the new subsidy plan, Maloney hosted a fundraising event at Bullfeathers restaurant on Capitol Hill that netted $9,500 in contributions from sugar growers and refiners, according to Federal Election Commission records and Maloney's election attorney, Andrew Tulloch. Tulloch called the timing of the July 31 fundraiser -- dubbed a "sugar breakfast" on the campaign finance report of one group -- a "pure coincidence."

The House sugar vote illustrates the hold that agricultural interests maintain on farm policy even as the number of full-time commercial farmers has shrunk to a few hundred thousand. Sugar groups have used campaign cash and far-reaching alliances with labor unions and politicians to expand their influence far beyond the 15 states and few dozen congressional districts where sugar is grown by fewer than 6,000 farmers.

Along with Maloney, a raft of other Eastern lawmakers voted against eliminating the sugar provisions. All eight House members from Maryland, home to a Domino Sugar plant in Baltimore owned by the huge sugar concern Florida Crystals, voted sugar's cause. Four of them, and both Maryland senators, have received political contributions from Domino PAC. Other recent Democratic recipients in the House include West Virginia's Alan B. Mollohan, Pennsylvania's Chris Carney and Maine's Michael H. Michaud.

So far this year, nine sugar farm or refinery groups have made more than 900 separate contributions totaling nearly $1.5 million to candidates, parties and political funds, according to federal election records and CQ MoneyLine. American Crystal Sugar Co., a Minnesota-based sugar-beet cooperative with 3,000 members, has made 317 contributions totaling $819,000. In July alone, its political fund contributed more than $70,000 to 26 House members, 24 of whom sided with it on the July 27 sugar vote.

"When you take on Big Sugar, you take on a huge political money operation," said Rep. Mark Steven Kirk (R-Ill.), a co-sponsor of the amendment that drew the sugar industry's ire.

The amendment, which was blocked 282 to 144, would have struck farm bill provisions that would raise support prices by half a cent per pound and guarantee U.S. sugar producers at least an 85 percent share of the domestic market for the next five years.

The expected effect of the House pro-sugar provisions and similar legislation in the Senate would be to keep the domestic price of sugar well above world levels. The Government Accountability Office has estimated that the sugar program costs consumers and food processors between $1 billion and $2 billion annually in higher prices for sugar and a vast array of products that contain it. Meanwhile, the new sugar subsidy would cost taxpayers tens of millions of dollars a year, according to economists and U.S. officials.

The provisions are aimed at protecting U.S. sugar growers from a likely surge of Mexican sugar imports next year, when restrictions end under the terms of the North American Free Trade Agreement. To keep such imports from depressing domestic prices, the Agriculture Department would be required to buy equivalent amounts of U.S. sugar and resell it to ethanol refiners at a deep discount. The Congressional Budget Office has estimated the cost at $1 billion through 2017.

Similar provisions with even higher price supports go to the Senate floor next week as part of that chamber's version of the farm bill. The Bush administration strongly opposes the provisions and has proposed a plan that would keep sugar prices high by cutting back on planted acreage, costing taxpayers little.

Sugar lobbyists say the sugar-for-ethanol provisions could be the catalyst for a new industry. But recent Agriculture Department studies have questioned whether high-priced U.S. sugar can be an economical source of biofuels, particularly at current depressed ethanol prices.

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