Summer is waning and year’s end will be here in a blink of an eye. And with it, the end of an era for America’s sugar industry, as the last sugar production facility in Hawaii officially closes.
Hawaii is home to the some of the most fertile soils in the world. It has a skilled workforce, efficient sugar mills, and a rich history that dates back 180 years. Still, decades of low prices, climbing business costs, increased regulatory burden, and a rising tide of foreign subsidization finally took its toll.
Hawaii is hardly alone. Since 1980, 65 U.S. sugar factories have closed, leaving just 48 in operation today. More than 100,000 Americans lost their jobs as a result. And, it’s little wonder when you consider that U.S. sugar prices are down 40 percent over the last two decades, when corrected for inflation.
There were no bailout packages or government rescue plans to save these U.S. sugar production facilities. Which is why it was so infuriating to read recent news coming out of Ghana about the massive Komenda Sugar Factory.
The facility closed in the 1980s, like many U.S. factories. But it was reopened by the government in 2014 after a $35 million loan from the national bank and $24.5 million in additional subsidies to spur the cane production needed to feed the factory.
Despite the handout from Ghana’s treasury, local media reports that “the factory is virtually on its knees” today, and now the “government is seeking 70 percent partnership in the form of huge capital injection in return for equity.”
In other words, Ghana’s government bailed out a failed factory, then it failed to revive it, and now it is asking private investors for a bail out.
Unfortunately, this kind of nonsense isn’t an anomaly. The same thing happened in Mexico, when the government took control of more than half of the country’s mills that were facing bankruptcy. The Mexican government has tried, since then, to sell off some of those mills.
It’s a perfect example of the kind of unleveled playing field America’s sugar farmers face every day. And it’s why U.S. producers back a global Zero-for-Zero sugar policy, which would tilt the scales back in favor of efficient businesses before more U.S. facilities are forced to say aloha (goodbye).