Going Sour on Sugar Payoffs

Some lumps on Capitol Hill

When it comes to protectionism, the sugar industry has been given some of the U.S.'s sweetest deals. For 40 years cane and beet growers were shielded by import quotas that not only helped keep domestic prices at twice the world level, but also fostered corruption and bribery and made Congressmen like the late Harold Cooley, Democratic chairman of the House Agriculture Committee, virtual Secretaries of State for Sugar.

Congress scrapped the quotas in 1974, but the sweetheart spirit survives. Under a four-year-old program of Government subsidies and price supports, growers still get twice the world level, or at least 150 per Ib. Now they are pushing legislation to add another eight-tenths of 10 to supports, and to keep the price rising by a full 7% annually until 1981. The raise may not seem like much, but each one-penny increase adds $500 million a year to Americans' grocery expenses.

Sugar growers claim that they need the increase to cover their rising costs, but for the first time in memory Congress does not seem so ready to swallow their sweet talk. With voters fuming over sky-high food prices, many Congressmen would just as soon see the bill never come to a vote. Says Massachusetts Republican Margaret Heckler, a member of the House Agriculture Committee: "Inflation is the nation's No. 1 enemy, and things just cannot stay the same for easy subsidies. The sugar bill represents the legislative process at its worst."

The U.S.'s 19,000 growers constitute a mere one-half of 1% of all farm families, but propping up their prices last year cost taxpayers and consumers $2.6 billion in support payments and artificially high retail prices for the sweetener. The subsidy system has also created an ever growing Government stockpile of sugar, currently 193,000 tons, that now lies rotting in Florida and Texas warehouses.

The struggle over sugar is an embarrassment for Jimmy Carter. Eager to slow the rising cost of food, the Administration condemned the bill when it was introduced in the House last February by a coalition of farm-state legislators. But when sugar industry supporters in Congress threatened to retaliate by blocking approval of the international trade agreement that was endorsed last month in Geneva, the White House abruptly switched signals and said the President would support the bill. The turnabout left White House Inflation Adviser Alfred Kahn in an impossible situation. Asked during House Agriculture Committee hearings if he considered the bill inflationary, Kahn replied: "Let the record show an embarrassed silence."

The industry itself is split on the legislation. The bill puts a limit of $50,000 in total direct payments to any grower, and that is welcomed by small farmers such as Idaho sugar-beet growers but bitterly opposed by plantation-scale growers in Hawaii and Louisiana. Another of the bill's clauses raises the minimum wage for field hands from $3 to $3.30 an hour, and Democratic Senator Russell Long of Louisiana argues that the provision would require an even higher level of price supports for growers. With that in mind, Idaho Democratic Senator Frank Church is pushing for a rise to 17-c- per Ib. Frets one industry lobbyist in Washington: "All this agitation for more subsidy is going to kill the goose that laid the golden egg." If so, it is about time.

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