How Crony Capitalism Dominates the Sugar Business

Next time I unwrap a candy bar, I'll think about sugar, free markets, the Florida Everglades and Monica Lewinsky.

Why? Because although the sugar in that candy bar may be natural, its price is entirely artificial -- depending, as it does, on government trade barriers, price supports and subsidized water, as well as the fact that the sugar industry is paying only a fraction of the costs of cleaning up pollution in the Everglades.

Put simply, crony capitalism is alive and well in the sugar business.

"The sugar industry doesn't make its money from agriculture," declares David Guest, a lawyer with Earthjustice and an outspoken critic of Big Sugar. "They make it from government."

That's an exaggeration, of course. The Florida industry grows lots of sugar, invests hundreds of millions of dollars in new equipment and employs thousands of people, as I learned last week during a day-long tour of the Lake Okeechobee region of south Florida, as part of the Society of Environmental Journalists conference in Miami. We met Guest from Earthjustice ("because the earth needs a good lawyer"), officials from Florida water agencies and the Army Corps of Engineers, an Audubon society biologist and, most interestingly, Judy Sanchez, senior director of public affairs for the U.S. Sugar Corp.

U.S. Sugar and Florida Crystals, which is owned by Fanjul family -- once described by Time magazine as the "First Family of Corporate Welfare" -- are the two biggest producers of sugar in south Florida. U.S. Sugar produces about 700,000 tons of sugar a year, about 8 percent of U.S. production. Sugar comes from sugar beets grown in the upper midwest, gives the industry political muscle from Miami to Minnesota.

Sugarcane is, for the most part, an environmentally friendly crop. It's a perennial that requires little in the way of fertilizers and pesticide. When pest controls are needed, they are usually natural, such as owls that are encouraged to nest in the fields because they can eat up to 1,000 times their weight in rodents each year. No part of the plant is wasted -- leaves and stalks are burned to generate the electricity that powers the sugar refinery.

Sugar cane field, with a home built for an owl

"Sugarcane needs basically two things -- sunshine and rain," Sanchez said. Florida has lots of both. So far, so good.

The trouble is, the rain is not evenly distributed throughout the year; it rains almost every day from June through October, and not much at all in the winter. During the dry season, farmers water for irrigation out of Lake Okeechobee to the north, after which the water flows south into the Everglades. As a result -- and this is a simple summary of a complicated story, about which books have been written -- the lake water contains high levels of phosphorus, a fertilizer, which threatens the Everglades, which are undergoing an $8 billion ecosystem restoration project, the largest in American history.

Sugar farmers, as part of the restoration plan, have been ordered to adopt best management practices to avoid the unnecessary use of fertilizers. On average, they have reduced the amount of phosphorus in their runoff by 55 percent, according to the South Florida Water Management District. But they're still adding to the problem, and discharging water that needs extensive and expensive treatment.

Next page: The Monica Lewinsky angle