Tuesday, February 24, 2009

Big Sugar: how to extract maximum value from the Everglades ... by gimleteye



Florida Bay is a disaster. The Everglades-- as a pristine natural resource-- are crashing. And the multi-billion dollar plan to revive the faded River of Grass has been laid bare for what it is: a work-around of the geographical fact and water-needs of the sugar industry whose political influence is anchored in place by provisions of the US Farm Bill, granting profitability for growers before a single seed of a single crop is planted.

Now there is a chance to secure more than 180,000 acres of land owned by US Sugar, one of the two major growers, in public ownership. The problem is that while the acreage is necessary to and would fundamentally improve the chances of getting clean water to the Everglades at the right time of year, and in the right quantities, US Sugar lands are not necessarily in the best location. Property owned by the Fanjul families of Miami and Palm Beach sits in between the remnant Everglades and US Sugar lands. And so, from the very first, how the Fanjuls would react to the US Sugar plan was a critical component in the timing of any deal that could be consummated.

As the economy continues its deep spiral downward, both the ability of the state to pay for and the sugar farmers' business plans have been scrambled. Of the two, it has always been the case that Big Sugar calls the shots. Give Gov. Charlie Crist credit for appearing to have pushed and re-arranged the equation. But nothing with sugar is ever a done deal, except perhaps its ongoing pollution of the Everglades.

From nearly the moment the state's planned acquisition of US Sugar was announced-- apparently, a tightly held conversation among principals only-- at least part of the sugar fraternity has been agitating to kill it. Its proxies-- local Chambers of Commerce and legislators of every stripe, even schoolchidren-- have all rallied to block the deal to protect "jobs". Never mind that those jobs depend on federal protectionism.

The goal of the Fanjuls has always been to extract the maximum value of its lands that were once an inseparable part of the historic Everglades. It has been pushing a couple of billion dollar future opportunities to further press its advantage with the state: a massive rock mine in the EAA and, also, an "inland port" facility comprising thousands of acres (even though there is no demonstrable need for either). In other words, the Fanjuls might be a willing player for the US Sugar purchase and throw some few thousands acres to provide connectivity of lands to the Everglades, if they could get their zoning and construction permits.

For decades, Big Sugar's business model provided for spin machinery, law firms by the gross, and political influence peddling in order to preserve all their options. Chiefly, they planned to create new cities and suburbs from Everglades farmland once the soil had been exhausted from growing sugarcane. They watched patiently as the housing boom consumed Wellington and West Palm Beach.

But the gas tank is empty on the sprawl engine. It is looking more and more likely, from the sugar baron's point of view, that the economy will take five to ten years to sort out. And climate change isn't helping either with the increasing likelihood of persistant, chronic drought. The point is: Big Sugar likes to pretend it has all the high cards, but under the rapidly deteriorating conditions of the economy, the real picture is not so clear. Under these conditions, the state should assert the need to protect water supply for cities and the edges of the Everglades, for food supply and not for speculation.

It is a new and not-so-comfortable world, even for billionaire farmers.


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