The flies are buzzing avidly, salivary glands are working overtime and once again on Capitol Hill it's open season around the old American sugar bowl.
As part of the pending farm bills, House and Senate are about to take on one of those perennially controversial issues -- price supports for the sugar industry -- and the hubbub is as intense as it ever has been.
The Reagan administration, fretful over inflation, possible costs to the government and adverse impacts on international trade, had intended to link up with opponents of the sugar-support plan. These argue that the pending bills could cost consumers an extra $2 billion for their sugar next year and perhaps $5 billion by 1985.
Now, however, sugar state legislators say the administration has promised to switch sides, in return for votes for the president's budget-cutting plan.
This would ally the administration with processors and growers of U.S. cane and sugar beets, who claim they are threatened by imported sugar and inadequate prices at home, and are traipsing the halls of Congress, singing their song of impending doom and seeking help on the measure approved by the House and Senate Agriculture committees.
The first clash in this multibillion-dollar skirmish is likely to occur after the Fourth of July recess, when the Senate is expected to begin debate on the bill extending and altering federal farm programs for the next four years.
The opposition includes consumer groups, food processors and refiners of imported sugar, the same coalition that killed a sugar support bill in the House in 1979.
In the House, Rep. Peter A. Peyser (D-N.Y.), who played a key part in that episode, has announced his intention to play a similar role this time around, and is drumming up support for an amendment to delete sugar provisions from the farm bill.
"If this reaches the floor, there is no question that the House will kill the sugar provisions," Peyser said this week. "The simple truth is that the sugar industry does not need this. They are constantly looking for the best of all worlds."
Leaders in the industry campaign for federal supports include GOP Sens. Mark Andrews, who grows sugar beets on his farm back in North Dakota, and Paula Hawkins of Florida, whose cane growers and processors would benefit from the bill more than any other state's.
Andrews registered an angry objection with the Department of Agriculture over the numbers and assumptions it used earlier this month in producing an economic analysis forecasting serious inflationary impact and windfall profits for producers if the Agriculture committees' sugar legislation passes.
Of all the agricultural support programs, perhaps only tobacco has been more controversial and troublesome to Congress than sugar. Years of political scandal and influence peddling killed a protectionist import-quota system for sugar in 1974. A price-support program was revived in 1977 but killed in 1979, with Peyser playing a leading role.
Throughout those years of debate, the U.S. industry contended that only legislation could insulate its customers from wild price swings and fend off highly subsidized foreign producers whose "dumping" of cheap sugar could undermine American self-sufficiency.
Notwithstanding the arguments, price swings did occur when federal sugar programs were in place. While some domestic sugar producers have shut down operations, the industry generally is prosperous, if recent corporate financial statements are accurate.
The idea behind the House and Senate bills is to establish a 1982 sugar price support of 19.6 cents per pound. Should market prices fall below that level, a processor could get a loan from the Commodity Credit Corp. (CCC) with his sugar as collateral. The loan would have to be repaid within the same fiscal year, ostensibly to avoid federal budget obligations, or the sugar would be forfeited to the government for resale.
But USDA's economic analysis indicates that sugar prices would have to be artificially maintained at 26 cents or more per pound next year with duties and fees on imported sugar to prevent large amounts of sugar from going into CCC stocks.
A rule of thumb in the industry is that each penny increase in the price of sugar boosts consumer expense by about $300 million. Under this formula, with the anticipated price rises if a support program is created, USDA calculates that additional consumer costs would be about $2.2 billion annually, and nearing $5 billion by 1985-1986.
As in 1974, 1977 and 1979 when Congress debated the sugar support issue, most of the players are the same, most of the arguments are the same and most of the basic issues are the same.
But a new element is raised by the Department of Agriculture study: the prospect of hefty windfalls for sugar cane and beet processors if the legislation passes. A program adding $1 billion to consumer costs, the study says, would mean that 22 companies would get more than $300 million extra.
Companies such as Amagamated Sugar Co., Holly Sugar Co. and Michigan Sugar Co., which process beets; cane processors such as U.S. Sugar Corp., Gulf & Western Industries Inc., Sterling sugar Co., Castle & Cooke Inc. and IU International Corp. all reported sizable increases in earnings last year.
An element not raised by the USDA study puts an additional light on the question of the processors' professed need for federal support. The low-interest money received from the CCC has been reinvested by some firms to reap additional income.
Both Amagamated Sugar and Michigan Sugar used their CCC loan money, obtained at 9 percent, to brighten their corporate balance sheets further.
Amagamated, for instance, received $18.6 million in CCC loans, according to its 1980 report. The firm at the same time had some $20 million in marketable securities and, by another USDA estimate, had an opportunity to gain about $1.5 million in interest income, using the CCC loan as seed money.
Michigan Sugar's annual report shows interest and "other" income of about $1,067,000, mostly because of increased short-term investments.
The company said that part of the increase in its investments was made possible by "the company's participation in a government price support loan program."
Paradoxically, Michigan Sugar's portfolio of marketable securities included $1 million of discounted notes from Cargill Inc., the multinational grain-trading firm based in Minneapolis. Cargill, as a producer of corn sweetener from its wet-milling operations, is a direct competitor of Michigan Sugar and others in the cane and beet industry.