Bittersweet Battle

Sugar and price and disappearing documents

World sugar prices have plummeted from 65-c- per Ib. in 1974 to 7-c- today. That is good news for consumers, particularly for the country's biggest user, Coca-Cola Co. Each 1-c- drop in sugar prices saves Coke $20 million a year. But the tumbling prices are bad news for domestic growers of sugar cane and sugar beets, who contend they need a price of 17-c- per Ib. to meet their production costs.

The price fluctuations set the stage for a bitter controversy that has raged in Washington for months. Senator Frank Church of Idaho has turned beet red and Senator Russell Long of Louisiana has raised cane in an attempt to boost Government price supports for sugar, now 13.5-c- per Ib., to 17-c-. They are opposed by the Carter Administration, which insists that a price floor higher than 14.4-c- per Ib. would be inflationary. Last week the battle turned ugly when makers of corn fructose (a sugar substitute) accused the Administration of withholding documents needed to prove their charge that Carter's 1977 sugar policy was illegal.

But the dispute goes beyond prices. It also involves conflicting ideas of how the Government should help the sugar industry meet foreign competition. The Administration favors direct subsidies; this would keep down prices to housewives and big consumers (including Coca-Cola, which is headed by Carter's old friend J. Paul Austin). But subsidizing low-priced sugar reduces demand for corn fructose. Congress favors sugar import duties and quotas, which would raise prices and help producers of both sugar and corn sweeteners.

In May 1977, Carter rejected suggestions for import quotas and adopted a temporary program to pay producers up to 2-c- per lb. whenever the price of sugar dipped below 13.5-c- per Ib. The program was to stay in effect until Congress approved the International Sugar Agreement to stabilize world prices at between 15-c- and 19-c- per Ib. through Government stockpiling. Instead, Congress amended the farm bill, which became law Oct. 1, with a program of loan supports, tariffs and import fees intended to satisfy producers of both kinds of sweetener.

Since then, charge Congressmen, sugar growers and corn fructose producers, the Administration has dragged its feet in implementing the amendment. Tariffs were not imposed until November, and even then there were big loopholes that allowed foreign sugar to flood the U.S. market in December (TIME, March 13).

In January the corn fructose makers sued the Agriculture Department, charging that the agency had violated Congress's intent by not moving fast enough on the 1977 law. The plaintiffs then began a search of Government files for incriminating evidence. The lawyers asked for 20 documents that the Agriculture and Justice departments insisted on having reviewed by White House officials to determine whether they should be withheld on grounds of Executive privilege. They included presidential memorandums and minutes of Cabinet meetings. Since March the corn growers' lawyers have been asking about the status of the documents. Last week they were told by Justice Department Lawyer Joseph Sher that they need no longer ask--the documents were nowhere to be found. The growers went back to court and petitioned the judge to order the Government to produce either the documents or "all individuals in the chain of custody of these documents for deposition." TIME Correspondent Gregory H. Wierzynski reports that "those close to the suit say it is either a case of potentially explosive material that the White House wants to hide or extreme bungling by the Administration's legal staff." Replied White House Deputy Counsel Margaret McKenna: "There's nothing sinister about this. It's all probably very simple bureaucratic confusion."

To add to the White House problems, Long led a congressional delegation to the White House last week to press for sugar import fees and quotas. Said he: "If I went to my cane farmers and said something nice about President Carter, I would be lucky to get out with my hide." The President was conciliatory and promised to take a personal hand in finding a compromise to end the controversy.

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