A black and white cloud of steam and smoke rises from the Monte Llanos sugar mill in the northwestern Dominican Republic 24 hours a day, visible in daylight hours for miles across the waving fields of sugar cane where sweaty workers never look up from their swinging machetes.
They are busy harvesting the crop that means life itself to the Dominican economy, as it does all over the Caribbean Basin region. That way of life is now under heavy siege. Everywhere, prices are very low and market doors are closing, and it is partly the fault of U.S. efforts to shore up American farmers.
The sugar life of the Third World revolves first around the fields and then around the mechanized inferno of the mill, which is a numbing roar of steam, blazing furnaces and huge, careening wheels and belts. Gangs of men wearing only shorts shovel steaming sugar pulp all day long at Monte Llanos, earning $4 a day, while others hammer out replacement parts for the screaming grinders at a glowing forge. Environmental and worker safety rules seemed nonexistent.
About 2,000 workers at Monte Llanos, a middle-sized plant last modernized in 1956, live with their families in shacks and rags under the 24-hour drone of the mill. It may not seem like much of a life, but it is a great deal here in a country where 30 percent of the workforce is unemployed.
Now, the world-girdling network that brings sugar from Monte Llanos to America's coffee cups has been disrupted by a combination of U.S. and European policies that have flattened international sugar prices and shut markets. The exploding competition from corn sweeteners also has narrowed what market is left to the Caribbean producers, threatening by 1990 to end U.S. sugar imports altogether, according to a State Department study last year.
For Caribbean nations that depend on sugar as a primary foreign exchange earner, the potential gains of President Reagan's proposed Caribbean Basin Initiative are in danger of being wiped out by other administration decisions. Many countries in the region must rely on sugar as a major export crop because of their soil and climate.
"If present trends continue," said Felipe Vicini, a member of the Dominican International Sugar Policy Coordinating Commission, "it would be worse for us than all the major U.S. auto makers going down at once would be for the United States."
The Caribbean dilemma began in December when President Reagan, trying to pry his 1982 budget loose from a Congress desperate to go home for Christmas, agreed to a price support program for U.S. sugar producers in return for a few votes from southern legislators. Growers could get at least 16.75 cents per pound of sugar from the Commodity Credit Corp., he promised, if they could not get it from any other buyer.
Nobody then predicted this year's international sugar price nosedive. Relatively high 1980 prices, around 35 cents a pound, stimulated planting worldwide. Atrocious 1981 weather hurt last year's harvest and prices stayed high. Most important, the European Community has been guaranteeing its inefficient French and Italian sugar beet growers at least 29 cents a pound, and they worked overtime. And worldwide weather was fabulous for sugar.
"The result was an unbelievable glut this year," said a State Department analyst, close to 90 million tons. Sugar now goes for just over 8 cents a pound on the world market, less than it costs even the most efficient producers to make it.
"That's not a world price; it's a dumping price," said Horace Godfrey, lobbyist for Florida and Texas sugar growers. Traditional fees and tariffs raised to their legal limit, about 7 cents total, couldn't make incoming sugar costly enough to save domestic producers, but this year's budget problems mean that the Reagan administration did not want to buy the sugar either. To avoid that, President Reagan imposed quotas on imported sugar earlier this month.
"All this in effect preempts whatever might have been done for sugar in the Caribbean Basin Initiative," said Peter Johnson, head of the nonprofit Caribbean Central American Action, an educational organization funded by U.S. business groups. "It makes Latin Americans wonder if Reagan is really backing the CBI," which is now being reworked in Congress into a multilateral aid program.
Caribbean dependence on sugar income has been a central headache of governments in the region for centuries. Cuban revolutionaries railed against sugar as a colonialist tool, "but they found out when they took power that in terms of return on investment, they get back more from sugar than from anything else," said William M. LeoGrande, director of political science and Cuba specialist at American University.
Although Cuba now ships half its sugar to the Soviet Union and China, the other half sells on the world market and, when times are good, it is cheaper for Cuba to sell sugar and import other food than to grow the food itself, LeoGrande said. But the good times are treacherous.
Record high sugar prices in 1974--reaching 64 cents a pound on one memorable November day--led Fidel Castro's government to float several big development loans from European banks, and it could not repay them when prices fell. By 1976, Cuba owed $1.3 billion and had to cut back on imports, development and public consumption to the point of economic crisis, which ultimately led to the 1979 boatlift of economic refugees to the United States, LeoGrande said.
The Dominican Republic, now the largest U.S. supplier of foreign sugar, has lobbied for quotas to bring some predictability into its economy, but hates the fees and duties. Dominicans want to get out from under sugar and probably have the best chance of any Caribbean nation, but it is not easy.
Half the country's export earnings came from sugar last year, more than twice as much as from any other product. In a nation with a history of political upheaval, 100,000 people work at growing, harvesting, transporting and milling the cane, a crucial political fact. And only about 20 percent of the sugar fields could grow anything else but cane, which thrives in the thin, sandy topsoil that starves most other crops.
Dominicans at least have gold, bauxite and other products. In the small island nation of Barbados, where sugar first was grown in the New World, there is now nothing but sugar and tourism.
"If we abandon sugar, we would in a few years lose all of our topsoil," said Ambassador Charles Skeete, "and then agriculture would go, tourism would go along with the scenery and the entire social fabric of the country would be turned upside down. I don't think we have a choice."
While diplomats wrangle with decimal points, corn sweeteners are gradually taking more and more of the sugar market. The high-fructose sweeteners, economical to make at 11 cents a pound, are rapidly moving sugar out of soft drinks, the largest single U.S. consumer. An April 1981 State Department study, marked "limited official use," predicted that the sweeteners would halve U.S. sugar imports by 1985 and "could eliminate imports entirely and begin to displace domestically produced sugar before 1990."
A bookkeeper at Monte Llanos summed up the situation graphically. Asked what would happen if corn sweeteners, quotas or anything else killed the U.S. import market, he shrugged and made a slicing motion across his throat.
"We die," he said.