Louisiana’s Deep-Rooted Trade Clash

At an aging Louisiana mill, a bulldozer digs into a mountain of raw sugar and dumps it onto conveyer belts that shoot it into the belly of a barge for transport to a refinery. A sweet, fine mist cascades onto the bank of a bayou below. It is raining sugar.

Fifty miles away, it is raining rice. A tiny plane buzzes over a 4,000-acre farm, dropping 130 pounds of seed. With a pleasant pitter-patter, the seed falls into shallow ponds, where it will soak and bake this summer before turning into a lush carpet of long-grain rice.

Along stretches of rural southern Louisiana, there are two types of towns -- those built by sugar and those built by rice. They are two proud and inveterate industries; together they have had more than 300 years of harvests, and last year they generated $785 million for the state’s struggling economy.

This spring, they suddenly are at odds. Sugar and rice have become unlikely and uncomfortable adversaries in the Bush administration’s campaign to continue opening foreign markets to U.S. goods by erasing trade barriers between the United States and Central America.

The sugar industry thinks the proposed Central American Free Trade Agreement, or CAFTA, would flood the United States with more than 100,000 tons of foreign sugar each year, spelling doom for the domestic crop. Many think the Louisiana industry would shut down, taking 27,000 jobs with it.

The rice industry thinks CAFTA would protect existing business and open new markets, largely by phasing out duties and other restrictions on American exports.

Congress, which must approve the trade agreement, is expected to table the issue until after the presidential election. Some in agriculture are holding out hope for a compromise that would boost one industry without harming the other.

In Louisiana, the consensus is that someone is going to lose.

At Jeanerette Sugar Co., a cooperative mill owned by local farmers, General Manager David Thibodeaux is sure it’s going to be sugar farmers. The proposed trade deal has already made area lenders skittish about financing sugar mills and cane farms.

Wearing a white hard hat, Thibodeaux watched as workers filled the barge that had pulled up behind the mill on a shallow waterway called Bayou Teche.

The sugar in the barge will be converted into white table sugar and sold under the Domino brand. The 67-year-old mill, one of seven in the region surrounding Jeanerette and nearby New Iberia, processes 7,000 tons of sugar cane from local farmers. It produces about 70,000 tons of raw sugar per year, as well as 3 million gallons of molasses.

The Louisiana sugar industry has weathered numerous problems in recent years. Farmers say the weather has been particularly cruel, alternating between too much water, in the form of hurricanes, and too little, in the form of droughts.

“But this trade deal is the worst, the most serious threat we’ve ever had,” Thibodeaux said. “If they allow this to happen, it is the beginning of the end. We are all for fair trade. But when you are going to put so many people out of work, how can that be fair?”

The same day, in a town called Branch, Paul “Jackie” Loewer Jr. pulled his pickup alongside one of the ponds where he and his two brothers -- third-generation farmers -- grow rice. Loewer, 61, the oldest of the brothers, dug the heel of his boot into the mud to bury a stray seed.

“The birds will get a little, but that’s OK,” he said. “We’ll have a lot on our hands.”

Unlike the often persnickety sugar fields, rice is a consistent and sturdy crop. The seed dropped that morning will yield 6,000 pounds of rice, and Loewer was in good spirits, even as he envisaged the long workdays that harvest would bring.

His optimism was not unfounded.

President Bush, seeking to blunt the effects of a soured economy, has launched a campaign to open foreign markets to U.S. goods and services. And rice -- along with such industries as poultry and cattle ranching -- would be one of the most direct beneficiaries.

Bush argues that opening foreign markets would create more jobs for American workers, an important contention, considering that 1.8 million jobs have been lost since he arrived in the White House.

Bush also thinks American consumers would see lower prices. CAFTA would open the markets of Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras and Nicaragua to an array of U.S. goods and services.

A spokesman for the U.S. trade representative, the president’s principal trade policy advisor, said the administration had made every effort to balance the needs and desires of all agricultural industries.

“There is a tremendous amount of opportunity for American agriculture to open up markets in Central America,” said spokesman Richard Mills. “We believe it is a great agreement for the United States.”

One recent analysis conducted by the American Farm Bureau, a Washington-based group that represents farming and ranching families, found that CAFTA would increase U.S. agricultural exports by $945 million per year by 2024. That would be more than enough, the group found, to compensate for the damage done to sugar.

“Everybody has to fight their own battles,” said Jim Willis, president of international programs at the U.S. Rice Producers Assn. in Houston. “That’s just business today.”

Though Bush has pushed hard for CAFTA’s passage, Sen. John F. Kerry, the presumed Democratic presidential nominee, opposes the agreement in its current form. Like labor leaders and other activists, Kerry thinks the agreement would not provide enough labor or environmental protections, and says too many jobs would disappear in the effort to open foreign markets to U.S. goods.

In January, the U.S. trade deficit widened to a record $43.1 billion, and Democrats have charged that Bush’s free-trade campaign is partly to blame for job losses.

“If you raise environmental and labor standards for everyone across the world so we are on a level playing field, then it helps all industries, particularly agriculture,” said Kerry spokesman Bill Burton. “When we are on a level playing field, nobody can compete with the American worker.”

Bush won Louisiana by nearly 8 percentage points in 2000. Recently, though, Democrats have won the governorship and retained a U.S. Senate seat by fending off aggressive, well-financed campaigns by Bush-backed Republicans. Democrats think the state is in play in November and that Bush’s stance on CAFTA will help them. In Jeanerette, there is reason to believe they are right.

“There’s not too many people in the sugar industry who are in support of President Bush or his administration right now,” said Thibodeaux, who voted for Bush in 2000. “I can’t vote for him. He’s going to put me out of a job.”

Louisiana Republican leaders say they remain confident that Bush will win the state again. But they say the party has been stung by the administration’s inclusions of the sugar provisions during CAFTA negotiations.

Rep. David Vitter (R-La.) said GOP leaders were given “absolute assurance” by the White House that sugar would not be hurt. Vitter said they were “very surprised and very disappointed” to find otherwise.

“I do not try to put different Louisiana industries on a scale and side with one if the balance tips slightly in their favor. I think that would be unfair,” Vitter said. “This deal would cause severe and permanent damage to an industry like Louisiana sugar.”