Sugar industry sour on CAFTA
07/29/2005
Kevin Diaz,
Star Tribune Washington Bureau Correspondent
July 29, 2005
WASHINGTON, D.C.—David Kragnes, a second-generation sugar beet farmer from Moorhead, stayed up past midnight Thursday to watch Congress pass the Central American Free Trade Agreement.
“I was done weeping by about 1 a.m.,” he said.
The hard-fought trade accord, known as CAFTA, is seen throughout Minnesota’s Red River Valley as the beginning of a flood of cheap cane sugar from El Salvador, Guatemala and the Dominican Republic.
Despite dire predictions about the havoc CAFTA could wreak in the state’s $2 billion beet sugar industry, farmers like Kragnes are determined to plow on, mindful of who helped them and who didn’t in the epic trade battle that culminated in Thursday morning’s 217-215 vote in the House.
“Yesterday was a sunny day, and I was working on the combine,” said Kragnes, 53, whose 495 acres of sugar beets are halfway to October’s harvest. “Today I got up, it’s a sunny day, and I’m working on the combine. So life hasn’t changed here in the Valley all that dramatically.”
Like several thousand other beet farmers in the Red River Valley—the nation’s top sugar-producing region—Kragnes will hope for the best and prepare for the next trade battle in Washington. That one is likely to be over pending negotiations to knock down trade barriers with Thailand, the world’s second-largest sugar exporter, after Brazil.
“I’m a farmer, so I have to be optimistic,” said Kragnes, who is also a director at American Crystal Sugar Co.
Coming off a major political defeat for the industry—and a major victory for the Bush administration—Minnesota beet farmers said they are now looking to the future.
“This bloody CAFTA battle served no one’s interests,” said Mike Hasbargen, chairman of the Minn-Dak Farmers Cooperative in Breckenridge. But, he noted, the United States is currently negotiating trade deals with 21 other sugar-producing nations that, collectively, export 25 million tons of sugar annually, enough to eliminate U.S. sugar production, according to the American Sugar Alliance, the industry’s lobbying arm in Washington.
“We’re willing to fight that fight,” Hasbargen said.
Minnesota’s sugar farmers, perennially the state’s top political contributors, provided about $1 million to political coffers during the 2003-04 election cycle, according to federal election reports. The industry is expected to play a significant role in next year’s Senate race in Minnesota, as well.
“America’s sugar farmers are indebted to the members of Congress who stood by us on CAFTA,” said Steve Williams, a Minnesota sugar beet producer and president of the Red River Valley Sugarbeet Growers Association.
The state’s congressional delegation voted almost entirely along party lines, save Rep. Gil Gutknecht, a Republican who split from the GOP leadership to vote against CAFTA.
The leading Republican candidate in the 2006 Senate race, Rep. Mark Kennedy, voted for CAFTA—a critical move, considering the treaty passed by one vote.
“That one vote, you could lay at the door of Congressman Kennedy,” Hasbargen said. “Here’s a guy who should have been with us, and he chose not to be.”
Kennedy, in statement, said CAFTA “will be good for Minnesota farmers and manufacturers,” noting that the state could see a $47 million increase in agricultural exports to Central America.
He also argued that the state’s sugar beet farmers will be helped by a side agreement with the Bush administration to divert excess sugar imports into a pilot ethanol program.
Sugar industry officials have rejected Kennedy’s assurances, suggesting that he may pay a price among the state’s estimated 32,000 sugar beet workers.
“I have a saying that if you can’t hold a grudge for three generations, you’ve got no business farming in the Valley,” Kragnes said.
But Kragnes and other sugar beet farmers have also found themselves cut off from other such major agricultural groups as the American Farm Bureau Federation, which supported CAFTA.
“Obviously, we’re concerned about what the future is going to bring,” Kragnes said. “And whether the administration now will be vindictive in the next farm bill, or whether it will be understanding that we made some decent arguments and won’t try to run us out of business.”