The Sugar Beat
Guatemala
Government InterventionThrough a combination of tariffs and non-tariff measures (e.g., a unique requirement that vitamin A be added to sugar), the Guatemalan government effectively blocks all foreign imports. The industry is regulated and controlled by two organizations owned and operated by members of the sugar industry itself—ASAZGUA and COMETRO, the former being responsible for pricing in the domestic and export markets and the latter determining internal marketing and distribution. Government-sanctioned marketing organizations manage sales to ensure that domestic prices are maintained at levels generally twice the dump market value. Labor and Environmental StandardsWorkers' rights remain one of Guatemala 's biggest problems. According to the U.S. State Department, Guatemalan employees “live under threat from their employers, and labor unions [are] weakened by lack of enforcement...”According to a 2006 report by the National Statistics Institute, well over half a million children had to “work to survive.” Child labor is most common in export industries in Guatemala—the informal and agricultural sectors “regularly employed children below 14 years of age…” Guatemala has a general environmental law, but little to no standards for air and water quality. Production and PriceOver the past 15 years, land in Guatemala sugarcane production has expanded. Today, the country produces on average nearly 2.1 million metric tons of sugar per year.Only one-quarter of this sugar is consumed domestically—Guatemala exports 1.4 million metric tons a year on average. These surplus tons are exported to the U.S. and dumped on the world market. Like almost all sugar producers, Guatemala’s sugar industry cannot survive solely on depressed dump market sugar prices. Unlike the United States, which imports nearly 15% of its sugar supply regardless of need, Guatemala buys no foreign sugar. Though it is the 18th-largest producer of sugar worldwide, it is the sixth largest global exporter. In spite of this, the WTO allows Guatemala to impose sugar import duties as high as 160%. Wholesale sugar prices in Guatemala were 18 cents per pound in 2008, nearly 50% greater than the dump market level at the time. All sugar consumed in Guatemala must be fortified with vitamin A. Though touted as a successful micronutrient program, this actually serves to increase the domestic price and acts as a very effective import barrier. Trade with AmericaGuatemala is one of the 41 countries from which the United States imports sugar. The United States is forced to accept this sugar whether the market needs it or not. As part of the Central American Free Trade Agreement (CAFTA), Guatemala has been granted incrementally increasing duty-free access to the U.S. market.The U.S. market is already oversupplied with subsidized foreign sugar, which drives down prices, forces sugar facilities to close, and threatens 146,000 U.S. jobs. Efficient U.S. sugar farmers cannot afford to trade away more of their market. |
Audio & Video
American Crystal Sugar Company
American Crystal Sugar Company is a world-class agricultural cooperative specializing in the production of sugar and related agri-products.
Sugar Cane Growers Cooperative of Florida
Learn how sugar is grown, harvested, milled and refined.
Jack Roney, ASA Director of Economics and Policy Analysis, Talks About Sugar Policy's No-Cost Projection Through 2020
Just as it has since 2002, the U.S. sugar policy is projected to operate at zero cost over the next ten years, according to USDA.