How Protectionism Is Destroying the Everglades

Aaron Schwabach

Aaron Schwabach is Professor of Law and Director of Center for Global Legal Studies at the Thomas Jefferson School of Law. He received his J.D. from the University of California, Berkeley (Boalt Hall), in 1989. He can be reached via e-mail at aarons@tjsl.edu.

[31 ELR 11499]

One of the sacred canons of the antiglobalization movement is that globalization of trade is bad for the environment. Free-trade enthusiasts, on the other hand, would have us believe that free markets promote wealth (probably true) and that wealth is good for the environment (possibly true, at least some of the time). The truth is probably somewhat more complex. On the antiglobalization side, there are situations in which free trade, coupled with lax regulation, will encourage resource exploiters to pass along significant environmental externalities to their compatriots, achieving enhanced profits while diminishing the wealth and environmental well-being of their countries.

On the free-trade side, however, there are certainly situations in which protectionist regimes lead to government-protected environmental destruction for the sake of protecting otherwise unprofitable industries. Japan's whaling industry is an oft-cited example. Here in the United States, one of the most egregious cases is that of the sugar industry.

Sugar is grown in several states in the United States, either as sugar beets or sugar cane.¹ Growers are protected by a complex price-support system that keeps U.S. prices at two to three times the world price and shuts out foreign competitors. Among America's sugar-growing regions is one of the world's most fragile and unique ecosystems, designated by the United Nations as a World Heritage Site: the Florida Everglades.

The United States grows sugar in this environmentally sensitive region despite the lack of any competitive advantage.² The soil is not really suitable for sugar cane, and the climate, warm as it is, is not warm enough. Special varieties of sugar cane have had to be developed for the Everglades, and massive amounts of fertilizers are required.

The most serious problem, though, is that the Everglades is too wet for agriculture. The federal government has invested enormous effort and expense to drain the northern portion of the Everglades to make it possible to grow a crop that can be grown more cheaply, with less environmental destruction, elsewhere.

Leaving aside the costs of draining the Everglades, the price-support system costs Americans approximately $ 2 billion per year.³ In other words, we are paying a small number of wealthy individuals and corporations to destroy the Everglades for us. And antiglobalization activists have unwittingly become their allies.

The solution is simple, although achieving it in a world of interest-group politics will be difficult. Cut off the subsidies, open the sugar market to foreign trade, and there will be no more reason to grow sugar in the Everglades. The $ 2 billion currently wasted each year could be plowed back into the economy. Perhaps in the first year it could be used to purchase the privately owned land in the northern Everglades for rehabilitation and inclusion in the Everglades National Park.

The Government Invades the Everglades

The Everglades is like no other place on earth. It is a "river" only in the sense that it contains freshwater flowing slowly toward the ocean. It flows so slowly that any individual drop of water leaving Lake Okeechobee is likely to have evaporated and fallen again as rain several times before reaching the Florida Bay. In many places it is only inches deep, but the peaty soils underlying it are also saturated with water—when that water is removed, they subside and can even catch fire with disastrous results.

Where the Everglades is still relatively unaffected by fertilizer runoff from the sugar plantations, its surface is covered with sawgrass. The sawgrass shelters numerous species of animals, including wading birds. Where phosphates have intruded into the Everglades, the sawgrass is partially or totally replaced by cattails, which clump too tightly for the wading birds to land or move among.

The popular image of the Everglades as a "river of grass" comes from the title of the famous book by Marjorie Stoneman Douglas.⁴ The dominance of sawgrass is itself a sign of loss of biodiversity, however. As other forms of plant cover vanished as a result of human activities in the 19th and very early 20th centuries, the ecological niches that were [31 ELR 11500] opened were filled with sawgrass, just as the sawgrass itself is now being displaced by the cattails. As early as 1929, this environmental disruption led one botanist to lament "the wholesale devastation of the plant covering, through carelessness, thoughtlessness, and vandalism in the Peninsular State[.]"⁵

The Everglades hydraulic system is completely if poorly regulated by numerous federal, state, and local entities. Administratively, the Everglades can be divided into three main areas. To the north, immediately south of Lake Okeechobee, is the Everglades Agricultural Area (EAA) where sugar cane is grown. To the south of the EAA, in the central Everglades, are the Water Conservation Areas, which receive excess water drained from the EAA and supply water to urban areas of South Florida. The southern part of the Everglades lies mostly within the Everglades National Park; although it is the least damaged of the three areas, it inevitably suffers from the environmental damage upstream.⁶

The greatest part of the farmland in the EAA is farmed by two sugar producers, U.S. Sugar and the Fanjul family's Flo-Sun Corporation and associated companies. Sugar is a relative latecomer to the Everglades, following on attempts to grow other crops that were disastrous both economically and, ultimately, in terms of human life. Attempts to make the Everglades suitable for agriculture began in 1918 after the completion of the Florida East Coast Railway to Moore Haven.⁷ Early would-be settlers cleared the land by slashing and burning. The soil then caught fire and in some places burned down to the underlying rock. The soil that remained was nutrient-poor; even when it was cleared and planted, crops failed and cattle died because of a scarcity of trace elements. Early settlers also found that the summers were too hot and the winters too cold for many truck crops.⁸

It quickly became evident that agriculture and agricultural communities could not exist in the Everglades without significant alterations in the region's drainage. In 1926, a hurricane caused Lake Okeechobee to overflow its levee, killing more than 300 people in and around Moore Haven. The hurricane also destroyed existing flood control works, forcing a realization that the agricultural earnings of the region were inadequate to pay for the flood control that would make agriculture possible over the long term.⁹ At this point a rational, market-based response would have been to abandon the idea of converting the Everglades to farmland and allow the land to return to a natural state.

Instead, the federal government stepped in, creating the Hoover Dike around the southern shore of Lake Okeechobee and a network of drainage canals to lower water levels. The peat and muck soils derive a significant part of their volume from the water they contain. Lowering the level of freshwater thus created additional problems of saltwater intrusion, soil fires, and soil subsidence. In Moore Haven, for example, 13 years of agriculture resulted in a subsidence of nearly one-half of the original depth of the soil.¹⁰

Florida, like the rest of the country, was suffering through the Great Depression. Even if the state government had possessed the will or the common sense to abandon the idea of turning the Everglades into farmland, the Everglades drainage control project provided the state with much-needed jobs and federal funds. At the same time, the unprofitability of farming in the Everglades and the economic collapse of family farming during the late 1920s and early 1930s drove many small farmers into bankruptcy, making it possible for a few large landowners to take over much of the agricultural land south of Lake Okeechobee. The most notable of these was the Southern Sugar Company, predecessor to today's U.S. Sugar. Southern Sugar's initial interest in sugar cane was as a source of bagasse, the byproduct remaining after juice has been extracted from the cane. The bagasse was used to manufacture Celotex fiberboard.¹¹

In addition to providing the sugar growers with arable land, the federal government provided them with a workforce. Local residents refused to work on the sugar plantations, indicating that the local labor market required higher wages and better working conditions. Instead of providing these, the sugar growers relied on the government's U.S. Employment Service, which recruited workers from other areas of the South, often with misleading information about wages and working conditions.¹²

U.S. Sugar's abuses of its workers were notorious at the time, ultimately leading to the company's indictment for violation of the Thirteenth Amendment for such actions as recapturing three workers who had attempted to escape and forcibly returning them to the plantation.¹³ The indictment was eventually dismissed, but a separate case struck down Florida's debt-peonage law.¹⁴ By the 1940s, the corporations that had relied on near-enslavement of Americans were forced to improve wages and conditions or look elsewhere for cheap, captive labor.¹⁵

Market mechanisms were not yet allowed to intervene in the labor side of the Everglades sugar industry, however, and U.S. Sugar chose the latter course. From 1943 until 1995, cane on the Everglades plantations was cut by guest workers from impoverished Caribbean island countries. These workers were brought to Florida on temporary visas and could be deported if they displeased their employer. Until 1947, the government itself even negotiated the employment contracts and paid the cost of round-trip transportation.¹⁶

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During World War II, the arrangement may to some extent have reflected market realities: labor was in short supply in the United States, while the Caribbean countries were suffering a labor surplus. The convenience of the growers was evidently a greater consideration, however, since workers from Puerto Rico were not included in the guest worker program. One official explained that Puerto Rican workers, being U.S. citizens, could not be "deported and sent home, if it does not work."¹⁷

The "temporary" guest worker program outlasted World War II by half a century,¹⁸ just as, for example, the Spanish-American War telephone tax has outlasted the Spanish-American War by over a century.¹⁹ The labor system was noted for its abuses, but a steady supply of new workers was guaranteed by the poverty of the Caribbean countries. The program finally ended not because it was inhumane but because it had become unprofitable for growers. Attorneys had brought lawsuits on behalf of underpaid and mistreated cane workers while, as one grower's attorney stated: "Machines are cheaper, they're more efficient, and they rarely sue."²⁰

The Modern Sugar Regime

Every few years, the Congress of the United States of America voted generous price supports for a handful of agricultural millionaires in the great state of Florida. The crop that made them millionaires was sugar, the price of which was grossly inflated and guaranteed by the U.S. government. This brazen act of plunder accomplished two things; it kept American growers very wealthy, and it undercut the struggling economies of poor Caribbean nations ….²¹

Ironically, the Caribbean countries from which the cane cutters came were poor in part because of their inability to export their sugar cane crop to the United States and the consequent decline of their sugar industries. Prior to 1960, they were unable to export sugar cane to the United States because 98.6% of the U.S. quota for foreign sugar was reserved for a single country: Cuba.²² When the United States shut off imports of Cuban sugar in July 1960, these countries benefitted somewhat, although U.S. sugar producers benefitted far more.

There is thus a further irony in that the Everglades sugar industry received a major boost from South Florida's favorite enemy: Fidel Castro. After taking part in the liberation of Cuba during the Spanish-American War, the United States gave preferential treatment to Cuban sugar. As time passed, more and more of this sugar was grown on lands owned by Americans. When this property was nationalized after the Cuban revolution, the United States retaliated by cutting off Cuban sugar imports.²³ Although the ban was adopted in pursuit of a foreign policy goal, it was also a windfall for domestic sugar producers.

Although drainage is the single biggest culprit, the Everglades ecosystem is also harmed by the conversion of large areas to single-species sugar plantations and the runoff of agricultural chemicals. In addition to the chemicals dumped on the land, draining and plowing causes oxidation of muck soils, leading to increased nutrient discharge. This in turn contributes to the eutrophication of the Everglades and Florida Bay.²⁴ The draining of the EAA was the first large direct subsidy from the federal government to the sugar growers, but by no means the last or the largest. In addition to providing a cheap and compliant labor force, thus keeping growers' costs low, the federal government has maintained a protectionist quota/tariff regime and loan program to support sugar prices at an artificially high level.²⁵

The Loan Program

The Commodity Credit Corporation (CCC), an organ of the U.S. Department of Agriculture, makes "recourse" and "nonrecourse" loans to sugar farmers.²⁶ The recipient of a recourse loan is responsible for repayment of all money borrowed.²⁷ While the recourse loans support the sugar industry by making credit available to those who might not otherwise receive it, they are not a direct price-support mechanism. The nonrecourse loans, which become available when imports in a given fiscal year reach 1.5 million tons, provide an option for sugar farmers to "sell" their crop to the government at a set price. Sugar is pledged as collateral for the loan; forfeiture of the sugar (plus a one cent per pound penalty) satisfies the loan even if the value of the sugar is less than the value of the money borrowed.²⁸ A borrower who forfeits collateral during one crop year is not disqualified from obtaining another nonrecourse loan in the next.²⁹

Sugar loans are made to processors rather than growers because sugar cane and sugar beets must be processed before they can be stored. To receive the loans, processors must purchase sugar cane and sugar beets from farmers at set support prices. Large growers such as U.S. Sugar are sufficiently [31 ELR 11502] vertically integrated to function as processors as well as growers, rendering the distinction irrelevant.³⁰

The nonrecourse loans thus guarantee sugar farmers a minimum price for their crop. In the case of the Everglades sugar growers, this price is 18 cents per pound, less the 1 cent per pound penalty.³¹ This is more than twice as high as the eight cents per pound that raw cane sugar brings outside the United States.³²

As a result of overproduction, in 1999 the price of sugar in the United States fell to 18 cents per pound.³³ By June 2000, the CCC was buying sugar at 20 cents per pound to support sugar prices.³⁴ Faced with the prospect of storing and ultimately disposing of a huge amount of sugar, the federal government set up a payment-in-kind (PIK) program for sugar growers.³⁵ The PIK program allowed sugar farmers to decrease production and receive in exchange an equivalent amount of sugar (up to $ 20,000 worth) from that stored by the government. The two giant Everglades sugar growers are unlikely to be affected by a mere $ 20,000 worth of sugar, but the program serves to restrict the supply of sugar produced by smaller sugar beet farmers, thus keeping sugar prices high.

The Tariff/Quota Regime

For years prior to the overproduction crisis of 1999-2000, growers were able to sell raw cane sugar for 22.5 cents per pound, 4.5 cents above the support price.³⁶ At the same time, sugar in the rest of the world sold for between one-third and one-half of this amount. The distortion of the U.S. market is only made possible by excluding foreign sugar.

During the 1970s, the United States imported about one-half of its sugar.³⁷ Sugar imports had risen from 3.7 million short tons (mostly from Cuba) in 1955, to 6.1 million short tons (not from Cuba) by 1977.³⁸ The modern protectionist regime for sugar was largely created during the ostensibly pro-free trade Reagan and Bush Administrations.³⁹ Through 1981, the United States continued to import about five million short tons of sugar per year. By 1987, this amount had fallen to just over one million short tons.⁴⁰

The basic elements of the current quota/tariff regime can be found in George Bush the elder's Presidential Proclamation No. 6179.⁴¹ Proclamation No. 6179 addressed the concerns and complaints of other General Agreement on Tariffs and Trade (GATT) Member nations by replacing the previous absolute quota system with a two-tiered tariff system.⁴²

Each sugar-producing country that trades with the United States is allotted a quota. Sugar imported within this quota is taxed at a low rate. Sugar outside this quota is taxed at a rate so high as to effectively prohibit the import of all but a few [31 ELR 11503] specialty sugars.⁴³ Raw cane sugar imported within the quota is taxed at between zero and 4.38 cents per kilogram (kg),⁴⁴ depending on the country of origin and the polarity⁴⁵ of the sugar.⁴⁶ Cane sugar imported in excess of the quota limits is taxed at between 18.26 and 39.85 cents per kg, again depending on origin and polarity.⁴⁷

The quota/tariff and price support regimes thus create a hidden tax. As one sugar processor says: "The U.S. sugar program is the most efficient tax we have …. It comes directly from the consumers and goes directly to the growers, who turn around and give some of the money to the politicians."⁴⁸ The hidden sugar tax is a regressive tax, since, assuming that all Americans consume roughly equal amounts of sugar, lower income families spend a proportionately higher amount of their income on sugar.

Finding a Loophole in the Quota/Tariff Regime: Heartland Byproducts

On any given day, a commodities trader on the New York Coffee, Sugar, and Cocoa Exchange might buy or sell refined white sugar free on board to New York (or elsewhere in the United States) for between 21 and 22 cents per pound. On the same day, that trader might buy or sell the same commodity for delivery anywhere else in the world for between 7 and 8 cents per pound.⁴⁹ This market imbalance puts considerable inward pressure on the U.S quota/tariff wall, and inevitably that wall has begun to spring leaks.

A Michigan company called Heartland Byproducts has found and exploited a loophole in the tariff regime. Heartland ships Brazilian sugar cane to a plant in Windsor, Ontario, where it is processed to produce a thick molasses-like syrup.⁵⁰ The syrup is transported to Heartland's Michigan plant and further refined to produce a sugar syrup that can be used in candy, ice cream, and cereal.⁵¹

Heartland's business depends upon its being able to avoid the sugar tariff; before importing its first gallon of syrup, Heartland obtained a ruling letter from the U.S. Customs Service (Customs) to the effect that the syrup was not covered by the restrictions on sugar imports.⁵² After Heartland commenced operations, it was immediately assailed by sugar interests. The U.S. Beet-Sugar Association petitioned Customs to reclassify the sugar syrup.⁵³ No fewer than 26 U.S. senators signed a letter to the same effect.⁵⁴

In mid-1999, Customs responded to the pressure by reversing its earlier ruling.⁵⁵ Two weeks before the new rule was to have taken effect, the Court of International Trade found that the revised Customs ruling was "arbitrary, capricious, an abuse of discretion, and otherwise not in accordance with law."⁵⁶ The decision has not been appealed, which is hardly surprising given the substantial likelihood that it would be affirmed on appeal. "Big sugar" and its supporters have not decided to coexist peacefully with Heartland, however. Sen. John Breaux (D-La.)⁵⁷ has twice introduced amendments to the existing tariff regime to exclude Heartland's syrup.⁵⁸

The International Reaction

Changing the existing tariff schedule would have international implications and might violate the obligations of the United States under international law. Two countries in particular are likely to take exception: Canada and Mexico. Canada would view a change in the Harmonized Tariff Schedule of the United States as a violation of the World Trade Organization (WTO) agreement,⁵⁹ and has already filed one complaint under the WTO's dispute resolution procedure in response to the Heartland matter.⁶⁰

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Mexico produces a surplus of about 600,000 tons of sugar per year and claims that the North American Free Trade Agreement (NAFTA) entitles it to export that surplus to the United States.⁶¹ The United States, however, has previously restricted Mexican sugar imports to 25,000 tons per year⁶² and now claims that a side agreement to NAFTA limits Mexico's quota for the year beginning October 1, 2000, to 116,000 tons.⁶³ Mexico has submitted the dispute to a NAFTA arbitral panel.⁶⁴

By the terms originally negotiated between the three countries, barriers to exports and imports of sugar originating in any of the NAFTA states should be removed in 2008.⁶⁵ Mexico and Canada do not produce sufficient sugar to meet U.S. demand, but do produce enough to affect the price of sugar in the United States. As a result, sugar growers are now insisting that this provision of NAFTA be renegotiated. One, U.S. Sugar executive James Terrill, disingenuously says that a common sugar market is "clearly unwise in a world market of sugar that has a sea of subsidies and total market distortions, overproduction in some places that shouldn't be producing sugar."⁶⁶

Conclusion

Nonmarket solutions have failed to protect the Everglades. The ecosystem's defenders have tried lawsuits⁶⁷ and costly legislative/regulatory rehabilitation schemes⁶⁸ without success. The one thing that would work is not more intervention, but nonintervention. The ongoing destruction of the Everglades is only made possible by a constant and massive infusion of money. Shutting off the flow of money to the sugar growers will shut off the flow of pollutants to the Everglades. A one-time expenditure will restore the flow of water from Lake Okeechobee to the Everglades.

Attempts to do this in the past have proven unsuccessful, however. Perhaps the closest approach was the proposed Sugar Stabilization Act of 1989.⁶⁹ The sugar lobby has been able to fend off such attacks on its subsidies because it is focused and organized, and its opponents are not. In particular, sugar subsidies have not drawn the attention from environmentalists that they should. The subsidies have been opposed largely by advocates of free trade, and many environmentalists are reluctant to make common cause with free-trade enthusiasts. Until they do, however, there is little hope for the Everglades.

1. "Sugar" in this Dialogue refers to sucrose (C[6]H[12]O[6]).

2. For example in Australia, with a hotter climate and better soil, a metric ton of cane sugar costs $ 255 to produce. In the United States the cost is $ 375 per metric ton. Paul Roberts, The Sweet Hereafter: Our Craving for Sugar Starves the Everglades and Fattens Politicians, HARPER'S, Nov. 1, 1999, at 54. See also Katherine E. Monahan, U.S. Sugar Policy: Domestic and International Repercussions of Sour Law, 15 HASTINGS INT'L & COMP. L. REV. 325, 339 (1992). The United States enjoys no particular competitive advantage in the production of sugar beets either. As one commentator observes: "It is a terrible waste of energy to grow sugar in Minnesota, but Congress pays you to do it." Daniel Fisher, Sticky Situation, FORBES, May 14, 2001, at 64.

3. The U.S. General Accounting Office estimates the cost to consumers at $ 1.9 billion. Sugar Industry Faces Big Test With Free Trade, ST. PETERSBURG (FLA.) TIMES, May 6, 2001, available at http://www.sptimes.com/News/050601/Business/Sugar_industry_faces_.shtml (visited Aug. 11, 2001). From 1982 to 1985, when the protectionist regime was at its most extreme, the subsidies cost consumers $ 3.7 billion per year. Monahan, supra note 2, at 343.

4. MARJORIE STONEMAN DOUGLAS, EVERGLADES: RIVER OF GRASS (1947); see also generally, e.g., DAVID McCALLY, THE EVERGLADES: AN ENVIRONMENTAL HISTORY 176, 179-80 (University Press of Florida 1999).

5. JOHN KUNKEL SMALL, FROM EDEN TO SAHARA: FLORIDA'S TRAGEDY (Science Press 1929). Small's book contains several dramatic before-and-after photographs of environmental destruction.

6. A fourth administrative unit is Loxahatchee National Wildlife Refuge, lying east of the EAA and northeast of Water Conservation Area 2A. On the complex network of state and federal administrative entities with authority over the Everglades, see Thomas T. Ankersen & Richard Hamann, Ecosystem Management and the Everglades: A Legal and Institutional Analysis, 11 J. LAND USE & ENVTL. L. 473 (1996).

7. McCALLY, supra note 4, at 121. The line to Moore Haven was the second to reach the region. The Florida East Coast Railway, serving Lake Okeechobee's fisheries, had reached Okeechobee City three years earlier. Id. at 120-21.

8. Id. at 121-23, 125-26.

9. See id. at 131-40.

10. Id. at 136, 138.

11. See id. at 161. Celotex fiberboard is manufactured by Celotex Corporation.

12. See generally, e.g., id. at 165-68; see also ZORA NEALE HURSTON, THEIR EYES WERE WATCHING GOD 108 (Lippincott 1937).

13. McCALLY, supra note 4, at 167-68.

14. Pollock v. Williams, 322 U.S. 4 (1944).

15. For a horrifying account of corporate slavery in the pre-World War II South, see Douglas A. Blackmon, Hard Times: From Alabama's Past, Capitalism, and Racism in a Cruel Partnership, WALL ST. J., July 16, 2001, at A-1, A-10.

16. McCALLY, supra note 4, at 168-69.

17. Id.

18. Id. at 169.

19. Although a measure to repeal the tax passed the House by 420 votes to 3 last year and was subsequently favorably recommended by the Senate Finance Committee, it seems unlikely to be enacted. See Repeal of Federal Communications Excise Tax, S. REP. No. 106-328, 2000 WL 899497 (Leg. Hist.) (2000); Repeal of Federal Communications Excise Tax, H. REP. No. 106-631, 2000 WL 666300 (Leg. Hist.) (2000); Janet Hook, Dip in Surplus Cures Capitol's Tax Cut Fever, L.A. TIMES, July 18, 2001, at A-1, available at 2001 WL 2503930.

20. Rosalind Resnick, $ 50 Million Win for Cane Cutters, NAT'L L.J., July 13, 1992, at 3. See also Rosalind Resnick, Cane Cleanup, NAT'L L.J., May 13, 1991, at 6; Margaret Cronin Fisk, A Sour Verdict for Cane Cutters: A Florida Jury Finds for a Sugar Company But Calls It "Shameful," NAT'L L.J., July 17, 1999, at B-11.

21. CARL HIAASEN, STRIP TEASE 13 (Warner Books 1993). Hiaasen's novel satirizes the connection between Florida sugar growers and politicians, as does, somewhat less incisively, the Demi Moore movie: STRIPTEASE (Universal Pictures 1996). (The title of the book is spelled as two words, whereas the movie's title is spelled as one word.)

22. Monahan, supra note 2, at 353.

23. Id.; see also Roberts, supra note 2.

24. McCALLY, supra note 4, at 172.

25. Monahan, supra note 2, provides a historical overview of U.S. sugar tariffs from the Sugar Tariff of 1789 (Tariff Act of 1789, ch. 2, 1 Stat. 24) through 1992.

26. See generally 7 C.F.R. pt. 1435 (2001); see also generally Federal Agriculture Improvement and Reform Act of 1996, Pub. L. No. 104-127, § 156, 110 Stat. 888 [hereinafter Federal Agriculture Improvement and Reform Act of 1996]; 7 U.S.C.A. § 1421(c)(2) (West 1999); 7 U.S.C.A. § 1446 (West 1999). The CCC is chartered under 15 U.S.C.A. § 714 (West 1999).

27. See 7 C.F.R. § 1435.2 (2001).

28. Id.

29. See id. § 1435.103(a).

30. See Roberts, supra note 2, describing the opening of U.S. Sugar's refinery in Clewiston, Florida.

31. 7 C.F.R. § 1435.102(a).

32. The world cash price for raw cane sugar was 8.49 cents per pound on Friday, August 10, 2001, down from 11.19 cents one year earlier. Cash Prices, WALL ST. J., Aug. 13, 2001, at C-12. See also infra note 49 and accompanying text. Sugar industry advocates often make the point that sugar production is heavily subsidized in other countries, particularly in the European Union, and that the sugar quota is necessary to protect against this subsidized sugar. This is not a lawful use of quotas, however. The appropriate mechanism are countervailing duties and antidumping duties, which are already in place. Antidumping duties have been imposed against Belgium, Canada, France, and Germany. Countervailing duties have been imposed against Belgium, Denmark, France, Germany, Ireland, Italy, the Netherlands, and the United Kingdom. See U.S. CUSTOMS, WHAT EVERY MEMBER OF THE TRADE COMMUNITY SHOULD KNOW ABOUT CANE AND BEET SUGAR: QUOTA, CLASSIFICATION, AND ENTRY 13 (2000).

33. Additional storage and marketing costs generally render it worth-while for a grower to forfeit sugar when the U.S. market price exceeds the support price by less than 2.5 cents per pound.

34. By mid-2001, loan forfeitures had left the government with over one million tons of sugar, stored at a cost of $ 1.4 million per month. Sugar Industry Faces Big Test With Free Trade, supra note 3. See also, e.g., Editorial, Sugar Industry … Sweet Deal for Growers Is a Toothache for the Public, NAPLES (FLA.) DAILY NEWS, Oct. 11, 2000. The ultimate disposal of the stored sugar presents an additional problem. In 1985, for example, 430,000 tons of sugar were forfeited. The United States eventually sold the forfeited sugar to China for five cents per pound.

35. See U.S. Announces Payment-in-Kind Program for Sugar. SUGAR NEWS, Aug. 22, 2000, available at http://www.sugar.ca/22Aug00Prt.htm (visited Aug. 11, 2001); see also Editorial, Cut the Sugar Tax, WASH. POST, Aug. 11, 2000, at A-24.

36. Fisher, supra note 2.

37. See, e.g., General Agreement on Tariffs and Trade (GATT) Secretariat Panel Report, United States: Restrictions on the Import of Sugar and Sugar Containing Products Applied Under the 1955 Waiver and Under the Headnote to the Schedule of Tariff Concessions, GATT Doc. L/6331-37S/228, at 20-22, Jan. 22, 1990 (adopted Nov. 7, 1990), available at 1990 WL 692208 (G.A.T.T.) [hereinafter GATT Report (1990)].

38. Id. at 22, para. 4.10. In the English system of measurement, a short ton is equal to 2,000 pounds. A long ton is equal to 2,240 pounds. Prior to 1988, quota allocations in the Harmonized Tariff Schedule of the United States (HTSUS) were measured in short tons; since the beginning of that year the allocations have been measured in metric tons, or tonnes. One metric ton is equal to 2204.623 pounds, or just over 1.1 short tons. See id. at 34 n.4; THE WORLD ALMANAC 560-61 (2001).

39. See Agriculture and Food Act of 1981, 7 U.S.C. § 1281 (requiring the Secretary of Agriculture to establish a price support program); Proclamation No. 4941, Modification of Quotas on Certain Sugars, Syrups, and Molasses, 47 Fed. Reg. 19661 (May 5, 1982) ("Emergency Quota Program" limited imports to 220,000 short tons). Proclamation No. 4941 was challenged, unsuccessfully, by sugar refiners in U.S. Cane Sugar Refiners Ass'n v. Block, 544 F. Supp. 883 (Ct. Int'l Trade 1982), aff'd, 683 F.2d 399 (C.C.P.A. 1982). See also Proclamation No. 5071, Import Quotas on Certain Sugars, Syrups, Blends, and Mixtures, 48 Fed. Reg. 30089 (June 28, 1983); Proclamation No. 5294, Import Quotas on Certain Sugar Containing Articles, 50 Fed. Reg. 4187 (Jan. 28, 1985); Proclamation No. 5340, Modification of Import Quotas on Certain Sugar Containing Articles, 50 Fed. Reg. 20881 (May 17, 1985).

40. GATT Report (1990), supra note 37, at 20, para. 4.1 and 22, para. 4.10; see also Monahan, supra note 2, at 334, 336-37.

41. Proclamation No. 6179, Modification of Tariffs and Quota on Certain Sugars, Syrups, and Molasses, 55 Fed. Reg. 38293 (Sept. 13, 1990). See also 15 C.F.R. pts. 2011, 2015 (2001) and 19 C.F.R. § 132.17 (2001). The previous protectionist measure, the Sugar Act of 1948, 61 Stat. 922, expired in 1974. It was then replaced by Proclamation No. 4334, Establishment of Tariffs and Quota on Certain Sugars, Syrups, and Molasses, 39 Fed. Reg. 40739 (Nov. 20, 1974). See also 7 U.S.C.A. §§ 624, 1359, 1359aa-jj, 1446 (West 1999); 19 U.S.C.A. §§ 1202, 3511 (West 1999).

42. See Proclamation No. 6179, supra note 41, para. 4; GATT Report (1990), supra note 37, at 34, para. 6.1. See also, e.g., Monahan, supra note 2, at 335. On sugar subsidies and international law generally, see, e.g., Marjorie Lister, The Functioning of Lome II, 16 J. WORLD TRADE L. 4343 (1982); Ian Smith, Prospects for a New International Sugar Agreement, 17 J. WORLD TRADE L. 308 (1983); Vincent A. Mahler, The Political Economy of North-South Commodity Bargaining: The Case of the International Sugar Agreement, 38 INT'L ORG, 709 (1984); Ian Smith, UNCTAD: Failure of the U.N. Sugar Conference, 19 J. WORLD TRADE L. 296 (1985); Betty Ruth Fox, Interaction of the Caribbean Basin Initiative and U.S. Domestic Sugar Price Support: A Political Contradiction, 8 MISS. C. L. REV. 197 (1988).

43. Despite the price difference, the United States imported only 1.8 million tons of sugar in 1999, while producing 8.4 million tons domestically. Bill Walsh, Smart or Smuggling? NEW ORLEANS TIMES-PICAYUNE, Apr. 30, 2000, at F-1, available at 2000 WL 6559915.

44. One kilogram is equal to approximately 2.2 pounds.

45. The quality of sugar is measured with an optical device called a polarimeter. The polarimeter is used to determine the optical rotation, or rotation of polarization, of light passing through the sugar. For a more thorough explanation of polarimetry, see Andreas W. Dreher & Qienyuan Zhou, Scanning Laser Tomography and Polarimetry of the Human Eye, OSA/IS&T's OPTICS & IMAGING IN THE INFORMATION AGE, Oct. 1996.

46. HTSUS §§ 1701.11, 1701.12 (2001). In addition to Canada and Mexico, one of the countries from which sugar within the quota limit may be imported without tariff is the Dominican Republic. One-half of the sugar-producing capacity of the Dominican Republic is owned by the Fanjul family, owners of Flo-Sun Corporation.

47. HTSUS § 1701.11.50.

48. Fisher, supra note 2.

49. Futures Prices, WALL ST. J., Aug. 13, 2001, at C-12.

50. Walsh, supra note 43.

51. Sugar Solution, ECONOMIST, Apr. 22, 2000, at 58.

52. Heartland Byproducts, Inc. v. United States, 74 F. Supp. 2d 1324, 1326-27 (Ct. Int'l Trade 1999).

53. Id. at 1328-29.

54. Together, the 26 senators received $ 528,322 in contributions from the sugar industry between 1995 and 2000. Jonathan D. Salant, Small Michigan Company Takes on Sugar Industry Titans, Associated Press Newswire, Apr. 13, 2000 (copy on file with author); see also Editorial, Congress: Don't Play Sugar Daddy, DETROIT NEWS, June 20, 2000, at 8, available at 2000 WL 3481863. Similarly, 11 senators visited the Secretary of Agriculture in 2000, to push for a bailout of sugar producers. Bruce Ingersoll, Big Sugar Seeks Bailout, Gives Money to Help Get Way, WALL ST. J., Apr. 27, 2000, at A-28.

55. U.S. CUSTOMS SERVICE, GENERAL NOTICE: PROPOSED REVOCATION OF RULING LETTER AND TREATMENT RELATING TO TARIFF CLASSIFICATION OF CERTAIN SUGAR SYRUPS, attach. B, available at http://www.customs.gov/imp-expl/modrev/h961273p.htm (visited Aug. 10, 2001).

56. Heartland Byproducts, 74 F. Supp. 2d at 1329, 1346, aff'd on reh'g, Heartland Byproducts, Inc. v. United States, 86 F. Supp. 2d 1339 (Ct. Int'l Trade 2000).

57. Senator Breaux received $ 32,050 in campaign contributions from the sugar industry in 1998, more than any other federal legislator. Mia Rabson, Taylor Sugar Company Engaged in Bitter Battle: U.S. Industry Claims Firm Evades Trade Tariff, DETROIT NEWS, Sept. 29, 2000, at 1, available at 2000 WL 3493246.

58. Bill Walsh, Sugar Amendment Gets Sour Reception: Breaux Legislation Dropped From Bill, NEW ORLEANS TIMES-PICAYUNE, May 4, 2000, at C-1, available at 2000 WL 6561041; Rabson, supra note 57; Bruce Alpert & Bill Walsh, On the Hill: News From the Louisiana Delegation in the Nation's Capital, NEW ORLEANS TIMES-PICAYUNE, Sept. 24, 2000, at 5, available at 2000 WL 21285414.

59. See Mia Rabson, Sugar Growers Protest "Molasses" Imported by Firm, DETROIT NEWS, Sept. 29, 2000, available at 2000 WL 4406387; Rabson, supra note 57; see also generally Barrie McKenna, U.S. Sugar Producer Faces Legal Threat: Bill Would Force Heartland to Pay Up to 10,000% Duty, TORONTO GLOBE & MAIL, Oct. 5, 2000, at B-8 (referring to the "long-running Canada-U.S. trade feud" over the sugar regime). On an earlier round in this feud, see Honorarium Revealed: Helms' Advocacy for Sugar Was Sweet for Him, Too, LEGAL TIMES, June 4, 1990, at 2.

60. See Request for Consultations by Canada; United States—Reclassification of Certain Sugar Syrups, WTO Doc. WT/DS180/1, G/L/317, G/AG/GEN/38 (Sept. 15, 1999), available at 1999 WL 717952 (W.T.O.).

61. See Mexico Requests NAFTA Dispute Panel on Surplus Sugar, WASH. POST, Aug. 17, 2000, available at http://tasa.tamu.edu/News46.html (visited Aug. 11, 2001).

62. See U.S.-Mexico Sugar Dispute Continues, FIN. TIMES, Oct. 24, 2000, available at http://www.mre.gov.br/acs/interclip/jornais/outubro/ftimes24a.htm (visited Aug. 11, 2001). Mexico's quota had been low since June 1997, when the Mexican government imposed antidumping duties on high-fructose corn syrup from the United States. Mexico Requests NAFTA Dispute Panel on Surplus Sugar, supra note 61.

63. U.S.-Mexico Sugar Dispute Continues, supra note 62; Rene Pastor, U.S. Urged to Renegotiate Sugar Provisions, Reuters English News Service, Aug. 6, 2001 (copy on file with author); Key Florida Grower Pushes U.S. Sugar Program, Reuters English News Service, July 26, 2001. Canada's sugar exports to the United States are limited to 10,300 tons. Mexico Seeks NAFTA Panel in Sweeteners Dispute With U.S., SUGAR NEWS, Aug. 22, 2000, available at http://www.sugar.ca/22Aug00Prt.htm (visited Aug. 11, 2001).

64. Mexico Seeks NAFTA Panel in Sweeteners Dispute With U.S., supra note 63; Mexico Requests NAFTA Dispute Panel on Surplus Sugar, supra note 61; see also U.S.-Mexico Sugar Dispute Continues, supra note 62.

65. See Pastor, supra note 63; see also U.S.-Mexico Sugar Dispute Continues, supra note 62.

66. Pastor, supra note 63.

67. The most notable of these is that brought by the U.S. Department of Justice: United States v. South Fla. Water Management Dist., 922 F.2d 704, 21 ELR 20774 (11th Cir. 1991), cert. denied sub nom. Western Palm Beach Co. Farm Bureau v. United States, 502 U.S. 953 (1991), on remand, United States v. South Fla. Water Management Dist., 847 F. Supp. 1567 (S.D. Fla. 1992), aff'd in part, rev'd in part, 28 F.3d 1563, 24 ELR 21397 (11th Cir. 1994), cert. denied sub nom. Western Palm Beach Co. Farm Bureau v. United States, 514 U.S. 1107 (1995). See also, e.g., Florida Sugar Cane League, Inc. v. South Fla. Water Management Dist., 617 So. 2d 1065 (Fla. Dist. Ct. App. 1993); Miccosukee Tribe of Indians of Fla. v. Florida Dep't of Envtl. Protection, 656 So. 2d 505 (Fla. Dist. Ct. App. 1995); Miccosukee Tribe of Indians of Fla. v. EPA, 105 F.3d 599, 27 ELR 20705 (11th Cir. 1997). See also generally Roberts, supra note 2; Lisa Gibbs, Federal Suit to Protect Everglades Bogs Down; Florida Blames Its Hired Guns From D.C. Office of Skadden, Arps, LEGAL TIMES, July 8, 1991, at 6.

68. See, e.g., the Everglades Restoration provision of the Federal Agriculture Improvement and Reform Act of 1996, supra note 26, § 390. On the unimpressive results thus far, see, e.g., Roberts, supra note 2; "'They've turned "restoration" into a huge water-supply project,' gripes Joe Browder, Washington environmental consultant and a long-time Everglades advocate."

69. The Act would have gradually reduced the support price from 18 cents to 12 cents per pound, and would have increased the import quota by a minimum of 500,000 tons per year for the years 1990 through 1993. Sugar Supply Stabilization Act (not enacted) §§ 2(b)(2), 3(a)(1), S. 552, 101st Cong. (1989); H.R. 1055, 101st Cong. (1989).