Luther Markwart, chairman of the American Sugar Alliance, cautioned today, on the eve of a meeting of the World Trade Organization (WTO)'s Committee on Agriculture in Geneva, that, contrary to WTO and U.S. sugar industry goals, "the world is moving further away from global free trade in sugar, rather than closer to it."

Markwart said, "The newest example is the financial aid package the Australian government has announced it is providing to its sugarcane growers. This A$83 million bailout is consistent with the growing amount of government aid being provided to farmers worldwide, for many crops, in the face of unusually low commodity prices."

He said, "The Australian bailout, however, is not consistent with Australia's trade rhetoric. Australia claims to be a free trade country and sharply criticizes the sugar policies of other countries, but I would suggest that first it should get its own house in order."

Markwart called Australia's latest subsidy for its sugar producers "somewhat ironic," given all the Australian government already does for its sugarcane industry. "In addition to a variety of sugar-specific subsidy programs for transportation, irrigation, and credit, the government permits a monopoly, the Queensland Sugar Ltd., formerly the Queensland Sugar Corporation (QSC), to control the purchase and sale of virtually all Australian cane sugar. The U.S. government, in a recent study of such marketing arrangements, rated the QSC as one of the most trade-distorting export monopolies in the world," he said.

Markwart was referring to "An Introduction to State Trading in Agriculture," by the U.S. Department of Agriculture's Economic Research Service.

"The WTO did not address the distortions caused by these state-trading- enterprise monopolies in the Uruguay Round, to the relief of Australia and the host of other foreign countries that allow them, but it must do so in the next trade round," Markwart said.

"The WTO should also be aware of the hypocrisy of the claims made by a group led by Australia, Brazil, and Thailand, called the Global Alliance for Sugar Trade Reform," Markwart said. "These countries target other countries' sugar policies and style themselves as free traders, but they are not. Brazil's sugar industry is built on elaborate subsidies for its massive cane alcohol industry. Thailand has long provided infrastructural and other financial aids for its cane farmers and controls marketing and pricing."

He said, "Distortions such as these are the reason the U.S. sugar industry has stated since 1986, at the start of the last trade round, that it supports the goal of genuine, global free trade in sugar. American sugar farmers are competitive by world standards, with costs of production well below the world average, so we would welcome the opportunity to compete directly with foreign sugar farmers. But we cannot compete with foreign governments."

Markwart said, "Our message to the WTO's Committee on Agriculture remains the same: Please make every effort to address all government intervention in the sugar marketplace in all countries, including the Australias, the Brazils, and the Thailands of the world that claim to be free trade, but are not. Only then can we achieve global free trade in sugar, and the level playing field, that has long been the goal of efficient American sugar producers."

The American Sugar Alliance is the national coalition of the growers, processors, and refiners of sugarbeets, sugarcane, and corn for sweetener. Markwart, the ASA's chairman, is also Executive Vice President of the American Sugarbeet Growers Association, representing 12,000 sugarbeet farmers nationwide.

For more information on the American Sugar Alliance, contact