Regional Update (January-March 1997)

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Cover Story - Environmental, Social Issues Change Florida Cane Growing

Five Members Appointed to Atlanta Fed Board of Directors

Environmental, Social Issues
Change Florida Cane Growing

Editor's note: This article focuses on the sugarcane industry from the perspective of Mark Sodders, a cane grower and a director of the Miami branch of the Federal Reserve Bank of Atlanta. The article was written by Harriette Grissom, contributing editor.

O ver the last decade Florida sugarcane growers have been forced to make massive changes in their agricultural practices to accommodate a quickening climate of environmental and social concerns. Thus far the industry has been able to respond, but continued pressures could hasten consolidation and severely crimp growers' prospects, according to Mark Sodders.

Sodders is a director of the Miami branch of the Federal Reserve Bank of Atlanta; he is also the president of Lakeview Farms and a vice president of Apelgren Corporation, both of which produce sugarcane. Describing himself as a small grower with 1,200 acres, running a farm that his family has owned since 1916, he is a director in the Sugarcane Growers Cooperative of Florida, which consists of 55 small to middle-sized producers in the Florida Everglades Agricultural Area.

While the sugarcane industry is not a major part of Florida's overall economy, it is a significant component of the state's agricultural sector and generates about 30,000 jobs with an economic impact exceeding $1.5 billion annually. Florida is the largest domestic producer of raw sugar, providing one in five teaspoons of sugar consumed in the United States.

The most recent challenges to cane growers have come from environmentalists' efforts to protect the Everglades from phosphorus pollution. Runoff from fertilized cane crops and diminished quantities of water flowing from Lake Okeechobee to the Everglades threaten wildlife habitats and the integrity of the wetlands ecology.

Designed both to preserve the Everglades and to ensure the future of agriculture in South Florida, the 1994 Florida Everglades Forever Act calls for major water treatment projects, changes in farming practices, and taxes on farmers to support phosphorus removal systems.

The bill plans 40,000 acres of man-made filter marshes—storm water treatment areas—to treat urban and farm runoff. This is the largest project of its kind in the world. It also levies a tax of up to $322 million on farmers to carry out treatment programs.

Phosphorus Discharges Reduced

According to Sodders, adoption of particular "best-management practices" stipulated by the Everglades Forever Act has been quite effective in reducing phosphorus discharges into the water. By taking special care in the application of fertilizers and holding water before releasing it into the water systems that feed the Everglades, farmers have been able to achieve levels of phosphorus reduction that exceed specifications of 25 percent annual reduction each year set by legislation. Records indicate reductions of up to 65 percent a year. While some of this reduction is attributable to heavy rainfall, Sodders admits, it nevertheless demonstrates cane growers' success in complying with environmental guidelines.

However, initial goals for phosphorus reduction are only a first step. Further reductions are believed necessary to forestall damage to the Everglades. This next step will mean more expensive projects.

Filter Marshes Stalled

At present, construction of the filter marshes is stalled because of controversy over implementation of the project, which has already logged cost overruns that water managers blame on higher-than-expected land prices. The U.S. Army Corps of Engineers, which must issue a permit to the South Florida Water Management District before construction can begin, has determined that the effectiveness of the filter marshes depends on moving certain phases of the construction forward and adding new technologies. Colonel Terry Rice, the corps' chief engineer in Florida, says the proposed stipulations will ensure that the filter marshes don't create more environmental problems than they solve. Meeting the Corps' guidelines will cost the state much more than planned, and the project is already $100 million over budget. The topic has been so fiery that legislators agreed to postpone action for thirty days.

The likelihood of higher costs has raised the possibility of new taxes for sugarcane growers. Thus far, legislators have voted against additional taxes, but they continue to feel pressure to get the project underway.

Land Use and Water Supply

At the heart of this particular conflict between environmentalists and cane growers, Sodders identifies a deeper dilemma that he believes will have to be addressed—sooner rather than later—regarding land use and availability of water in Florida. He says water supplies are not only being stressed by agricultural use—he believes farmers are to some extent "fall guys" in this debate—but even more significantly by increased population density and urban development. Cane does have some environmental advantages: it helps prevent erosion of sandy topsoil and requires less fertilizer than other crops. Sodders says that watering and maintaining South Florida golf courses creates phosphorus runoff equal to or exceeding the amounts created by farmers.

Rainfall has been in Florida's favor for the past nine years, Sodders adds. A cyclical drought could push the water situation to crisis proportions. If the water table is drained too deeply, saltwater incursion will contaminate groundwater.

Use of Immigrant Labor

In addition to coping with environmental requirements, cane growers have also had to shift their harvesting practices in response to what Sodders called "a public relations nightmare" regarding the use of immigrant labor to cut cane.

Like other labor-intensive agricultural industries, Florida cane growers had made use of labor available through a federally legislated provision that allows growers to use offshore labor when supplies of domestic workers can't meet farmers' needs. Traditionally Florida cane cutters came from Jamaica and lived in barracks-style housing on the cane farms. While they were paid reasonable wages ($7.50 an hour), through prior agreements with the West Indies Labor Council workers were required to send 23 percent of their earnings home to support family members or for holding in a domestic bank account. From the perspective of U.S. social and labor practices, it seemed to some observers that cane cutters were almost imprisoned. According to Sodders, however, laborers were able to amass what in their home country was a huge amount of money. He says the Jamaican Department of Labor lobbied Congress to continue the arrangement.

Exposés of what appeared to be intolerable working conditions forced cane growers to move to the use of mechanical harvesters. Australian harvesting equipment has been adapted to Florida's particular soil conditions. Sodders notes the shift has ultimately proven cost-effective. The cost of mechanical harvesting is about $6.50 per ton, as compared to $11 per ton for human labor.

Still, a short supply of skilled labor to operate and maintain equipment remains a problem for Florida cane growers. Sodders says skilled workers tend to head for the Florida coast for higher-paying jobs. U.S. cane growers not only face the pressure to meet tougher labor and environmental standards but also the competition from foreign growers who currently produce without such restrictions.

Industry Consolidation

Sodders also believes further consolidation is inevitable in the cane industry—a pattern that persists in late-20th-century U.S. agriculture. He says two large mills—owned by U.S. Sugar Corporation and Okeelanta/Osceola—now account for 80 percent of the cane produced in Florida. What is being lost, he notes, is not just an aspect of the economy but the way of life that goes with small, family-owned farms—an important dimension of Florida's culture that is not always apparent to tourists and sun-seekers.

Whether sugarcane production remains viable in Florida depends, he believes, on the ability of farmers and environmentalists to be guided by science and reason as they negotiate practices and standards.