Everglades Land Buy-Back

[Pangloss]

Couple articles:

http://www.latimes.com/news/nationworld/nation/la-na-everglades25-2008jun25,0,3721951.story

http://in.reuters.com/article/environmentNews/idINN2436313220080624?pageNumber=2&virtualBrandChannel=0

 

The state of Florida has arranged to buy back 187,000 acres of farmland currently owned by US Sugar corp. It's the biggest restoration purchase in Everglades history and a deal likened by Gov. Charlie Crist as being comparable with the founding of Yellowstone.

 

This story came completely out of the blue. A huge surprise even locally.

 

The land in question is just a few miles from where I live, and my wife and I have spent considerable time wandering about the Everglades in kayaks and air boats, so the deal hits somewhat close to home (literally) for me. The region has been deteriorating gradually for decades, and one of the main reasons for that is the constricted flow of water, which has gradually increased due to South Florida development. Encroachment on the Everglades stopped years ago due to sensible restrictions on the places where development could occur, but the increased demand for water combined with the current drought were turning the river of grass into a river of slightly-damp mud.

 

But that gradual change also affected the sugar business, and this deal seems to be one of those rare moments of clarity and unity between business and government. US Sugar realized its business was becoming unsustainable, and government realized it had an opportunity for real change. Astonishing, eh?

 

The deal will take place over six years, allowing for the retraining and relocation of employees, and involving the raising of bonds paid for in part by the sale of sugar during that time (I don't quite understand that; bonds are sold to the public, so that didn't really make sense, but that's reporting for you, or maybe I just misread something). $1.7 billion is a lot of money, but almost none of it (only $50 million) comes out of taxpayer wallets, and the bonds are a good investment -- Florida as a state is a rock-solid investment because of the tourist industry, which this deal actually helps to protect.

 

Obviously the owners get a pretty penny out of the deal, but it's their land and their business so that only seems fair.

 

I think this is a red-letter day for environmentalism as well as for Republican governor Charlie Crist. I'm sure it's no accident this comes right when Crist's name is high on the list of potential Vice Presidential nominees, but I think this would have happened either way -- Crist's star is definitely on the rise.

[Dak]

Obviously the owners get a pretty penny out of the deal, but it's their land and their business so that only seems fair.

 

Not really, no. isn't sugar-cane an extremely thirsty crop?

 

couldn't it be the case that the buisness responsable for growing the sugar-cane over-farmed (for their personal profits), started to cause land-drought, and -- having learnt the lesson from the tennisse valley -- the US govournment is now buying the land off of the buisness with tax-payers money.

 

iow, rather than farming responsably and cutting back production (and thus profits), the company has enjoyed unsustainably high profits, and, far from being shouted at for it, they're now getting their raped land bought off of them, whilst the tax-payer foots any repair bills.

 

of course, that could not be the case, but this is why i don't like trusing land-managment and food-production to big bisnesses.

[iNow]

I actually had a VERY similar reaction to Dak, but I didn't yet know enough about it to comment.

 

 

Something about this water deal does smell fishy.

[jryan]

iow, rather than farming responsably and cutting back production (and thus profits), the company has enjoyed unsustainably high profits, and, far from being shouted at for it, they're now getting their raped land bought off of them, whilst the tax-payer foots any repair bills..

 

If Government decides that they need to "repair' that swath of land rather than let it "heal" on it's own, they will be making a gigantic mistake. Our history of trying to help nature recover is littered with catastrophe.... nature does a much better job on it's own.

[padren]

Regardless of whether this deal is shady or not, I think the long term legacy after 30 years will be a very positive one... as long as future politicians don't shadily first intentionally botch reclamation and crookedly hand it back to corporate interests to tarnish the reputations of their predecessors.

 

Between shady deals that damage the environment and shady deals that result in such a reclamation project - I think this one (if it is indeed shady) helps tilt the scales more towards a balance between the two than towards one extreme. We've seen more than enough of the former, not so many of the latter.

[Pangloss]

Not really, no. isn't sugar-cane an extremely thirsty crop?

 

couldn't it be the case that the buisness responsable for growing the sugar-cane over-farmed (for their personal profits), started to cause land-drought, and -- having learnt the lesson from the tennisse valley -- the US govournment is now buying the land off of the buisness with tax-payers money.

 

iow, rather than farming responsably and cutting back production (and thus profits), the company has enjoyed unsustainably high profits, and, far from being shouted at for it, they're now getting their raped land bought off of them, whilst the tax-payer foots any repair bills.

 

of course, that could not be the case, but this is why i don't like trusing land-managment and food-production to big bisnesses.

 

Well, I think they were entitled to some sort of compensation, given that they've had that business (and employed people in that area) since long before we understood what it was doing to the ecology. I realize $1.7 billion sounds rather extreme, but that's not all going to the land/business owners. A lot of that goes to workers and outside investors (paying off debts), as I understand it. I think a third of the company was owned by the employees, and I've linked some information on that below.

 

I think skepticism and serious inspection of this deal is warranted, and I have no doubt that will happen over time. Your suggestion (if I read you right) that they remain in business but fork over a portion of their profit towards restoration efforts is interesting, but they'd still be using that water, and I don't see how you can do both. This wasn't a sustainable situation any way you looked at it. Perhaps with their output cut in half or something, I don't know. It's an interesting idea, though. (Haven't we seen that done in other areas of industry? It sounds familiar.)

 

Lake Okeechobee, just to the north of that area (and the reservoir for all of South Florida), has been in a very dire drought situation for a while now, and this is partly aimed at recovering that resource. There's a problem, though, in that water on those lands is contaminated with pesticides, which we don't want to feed into the lake (especially since they just finished a massive project cleaning up the exposed mud in the newly drought-exposed shores of the lake, which was thoroughly contaminated with as much as four times normal safe levels). This article at Bloomberg talks about that aspect of the story:

 

http://www.bloomberg.com/apps/news?pid=20601103&sid=aDZ_gjt0UxKE&refer=us

 

(Ironic that Miami just passed one of those popular new no-bottled-water ordinances, eh? I wouldn't drink my tap water if you PAID me to.)

 

Here's an article from the AP talking about the impact on people living in the area:

 

http://ap.google.com/article/ALeqM5i20qSM0a30NczVhksyYrUAMXu6wgD91HU23G0

 

Under the $1.75 billion deal, hourly employees will get a year's pay as severance, while salaried workers will get two years' pay. Since the company is partially employee owned, those who are vested will receive about $350 per share.

 

That's several hundred million right there.

 

Here's where Clewiston is on Google Maps, btw:

http://maps.google.com/maps?f=q&hl=en&geocode=&q=clewiston&sll=26.025531,-80.387418&sspn=0.006826,0.007596&ie=UTF8&ll=26.592211,-80.816803&spn=0.86943,1.505127&z=10

 

The lake is truly magnificent in that area and I really can't help but wonder if they ought to put some state money into building up a tourist trade in that region, working out some mass transit options to places like Miami Beach and Orlando. It's always been a vastly underutilized nature park. Oh well, one can only hope.

 

There are other criticisms of the deal, by the way. The one in the article linked below talks about the deal could ultimately cost twice the posted price because of interest in the bonds.

 

http://www.heraldtribune.com/article/20080627/APN/806270951

[Aardvark]

Well, I think they were entitled to some sort of compensation, given that they've had that business (and employed people in that area) since long before we understood what it was doing to the ecology.

 

 

Considering that their entire business only exists because of huge artificial protectionism, huge subsidies and privileged access to precious and scant water supplies, they shouldn't be entitled to another penny of the taxpayers money.

 

The position of the sugar business in Florida is an ongoing disgrace, it is an outrage, economically hurting American consumers, hurting Central and South American producers, environmentally devastating the Florida wetlands, retarding genuine biofuel development and abetting the Corn Ethanol disaster and leaching of the American taxpayer to fund the entire mess.

 

It's a prime example of pork barrelling, corporate welfare, that is rotting America like a cancer.

 

Their 'business' should simply have all artifical supports removed and then allowed to go bust like any other inefficent, worthless business would.

[Pangloss]

Well that's your opinion. It is, however, not the prevailing one. And while it might be interesting to see if the state could somehow strip that land off them, what would actually happen is that the land would stay where it is, and the situation would grow worse. So that's a nice little ideological rant, but it doesn't clean my back yard.

 

You realize, I hope, that Obama is going to do a lot more things like this if he gets elected. Your post suggests that the environmental extremists are going to find his tenure very frustrating, because he's going to accomplish a great deal by crossing lines they wouldn't dare cross, lest some "fat cat" get fatter.

 

(I'm moving this thread to Politics for further discussion, btw. It's not a demotion, I just thought it might merit some attention from a different subforum.)

[Sisyphus]

It smells like pork-barrel pseudo-corruption to me, but at least it (apparently) ends with this deal, and the place gets cleaned up. Net gain!

[Aardvark]

Well that's your opinion.

 

Yes. My very own homegrown organic opinion.

 

It is, however, not the prevailing one.

 

So? Since when has being correct been measured by how in tune with the current orthodoxy? You seem to have a real tendency to judge opinions on the basis of how conformist they are rather than on their merits?

 

 

And while it might be interesting to see if the state could somehow strip that land off them, what would actually happen is that the land would stay where it is, and the situation would grow worse.

 

Actually, the State could stop giving sugar subsidies, cheap access to water and high tariff barrier protections. That would clean up the situation very fast.

 

So that's a nice little ideological rant, but it doesn't clean my back yard.

 

And that's a nice use of prejorative language. Label any opinion you disagree with as 'ideological' and a 'rant'. It sure saves you from having to actually address the facts and reasoning of any argument you dislike doesn't it?

 

You realize, I hope, that Obama is going to do a lot more things like this if he gets elected.

 

I doubt it. I think Obama is an empty suit who will swivel in the breeze. I'm not expecting him to achieve anything particular except to pander to lobby groups.

 

But then that's just an opinion of mine.

 

Your post suggests that the environmental extremists are going to find his tenure very frustrating, because he's going to accomplish a great deal by crossing lines they wouldn't dare cross, lest some "fat cat" get fatter.

 

Since Obamas policy (at the moment) is to maintain tariff barriers against Brazilian sugar cane ethanol, in order to maintain the pork barrelling corn ethanol disgrace, the evidence so far is that he'll be energetically shovelling more swill into the pigs trough.

 

I'd love to be wrong, but the evidence is that he's a creature of pressure groups and lobbies. Maybe he does have some genuine principles. If he does, i'd love to hear what they are.

[Pangloss]

Actually, the State could stop giving sugar subsidies, cheap access to water and high tariff barrier protections. That would clean up the situation very fast.

 

Given the power of the sugar lobby that's a pretty huge "if", so you're still not even coming close to cleaning my back yard.

 

But even if we did somehow manage to eliminate the powerfully-backed sugar subsidy, you're basically talking about a $10 billion annual business receiving $2 billion in subsidies. Why wouldn't we just see a 20% increase in the cost of sugar? Do you have any supporting analysis from other sources to back up the notion that they would go out of business quickly if they lost those subsidies?

 

 

And that's a nice use of prejorative language. Label any opinion you disagree with as 'ideological' and a 'rant'. It sure saves you from having to actually address the facts and reasoning of any argument you dislike doesn't it?

 

Actually I was making a point, which is that according to all anaylsis I've read, any other solution than the one currently being pursued would have taken decades to accomplish due to court battles. Your point really was about ideologies -- as if you don't care whether the Earth is suffering so long as you can blame corporations for it. After all, you're dismissing a clear-cut solution solely because it is a compromise that includes any benefit to the landowners, however small, even though it immediately solves the problem and produces a far greater benefit is to the land and the people.

 

If that's not the case, I'm glad to hear it, but you're going to have to do a little better than casual dismissals and unrealistic assumptions.

[Phi for All]

But even if we did somehow manage to eliminate the powerfully-backed sugar subsidy, you're basically talking about a $10 billion annual business receiving $2 billion in subsidies. Why wouldn't we just see a 20% increase in the cost of sugar?

We probably would, but I think it's preferable to have the people who buy sugar pay for it. Subsidies ensure that I'm paying my part of the industry's profits even if I don't buy any of their product.

Do you have any supporting analysis from other sources to back up the notion that they would go out of business quickly if they lost those subsidies?

I don't think it's necessary, desirable or even probable that the sugar industry would go out of business without subsidies. They would be forced, like any other business, to find other ways of being profitable, hopefully without affecting taxpayers (as opposed to consumers).

[Pangloss]

As should be.

 

I just question this notion that eliminating the subsidy would cause all the land to immediately return to nature and public ownership (or at least faster than this deal will cause). Seems like a bit of a stretch to me.

[Aardvark]

Given the power of the sugar lobby that's a pretty huge "if", so you're still not even coming close to cleaning my back yard.

 

Fine, so you're just going to accept corrupt pork barrelling because it's backed up by a powerful lobby?

 

That's a pretty clear indictment of American democracy.

 

But even if we did somehow manage to eliminate the powerfully-backed sugar subsidy, you're basically talking about a $10 billion annual business receiving $2 billion in subsidies. Why wouldn't we just see a 20% increase in the cost of sugar? Do you have any supporting analysis from other sources to back up the notion that they would go out of business quickly if they lost those subsidies?

 

It isn't just the subsidies, remember? US sugar growing is so inefficent that it has to be protected by tariff barriers that keep US sugar prices almost double world prices. And even then the sugar growers still need subsidies to keep going.

 

Take a look at these figures

 

20.83 cents per pound, U.S. raw sugar price, May 2008

 

12.23 cents per pound, world raw sugar price, May 2008

 

(Sources: Cato Institute; U.S. Department of Agriculture)

 

Now, take a look at the ingredients on a can of your favourite non diet soft drink. In the US you'll see 'non fructose corn syrup'. In the rest of the world, you'll see sugar. That's because sugar is so artifically expensive in the USA (and non fructose corn syrup is NOT good for you)

 

If the subsidies and tariffs were removed the sugar industry would simply not plant any more sugar for the next harvest, it would stop.

 

 

Actually I was making a point, which is that according to all anaylsis I've read, any other solution than the one currently being pursued would have taken decades to accomplish due to court battles.

 

On the contrary, Congress could simply agree to eliminate the sugar tariffs and the solution would be immediate. No court cases would take place, there is no legal basis to challenge the government removing a tariff. It's just a shame that Senators such as Obama are so much in the pocket of lobbyists that they opposed the US governments proposal to remove those tariffs this year.

 

Your point really was about ideologies -- as if you don't care whether the Earth is suffering so long as you can blame corporations for it.

 

No, you are simply sticking the 'ideological' label on an opinion you disagree with as a means of trying to discredit it without having to deal with its arguments. I never stated, gave the impression or believe that it is ok for the Earth to 'suffer' as long as i can blame corporations. On the contrary, i think the damage caused by subsidies and tariffs is an outrage and should be put right as soon as possible by a simple act of government in removing the sugar tariff and the sugar subsidy.

 

 

 

After all, you're dismissing a clear-cut solution solely because it is a compromise that includes any benefit to the landowners, however small, even though it immediately solves the problem and produces a far greater benefit is to the land and the people.

 

I'm pointing out the corruption here. A small number of very rich people have pocketed taxpayers money to produce unwanted sugar in an environmentally destructive fashion. They have then forced up prices with tariffs, resulting in harmful substitutes being used in food products, consumers facing higher prices, an environmental disaster in Corn ethanol and pain for producers in poorer countries.

 

Pointing out that ending the sugar tariff and subsidy is the simple solution to this corrupt mess apparently makes me 'ideological':rolleyes:

 

If that's not the case, I'm glad to hear it, but you're going to have to do a little better than casual dismissals and unrealistic assumptions.

 

Perhaps i could take your 'non ideological' desire to give yet more taxpayers money to rich porkbarrellers and ignore the idea of ending the distorting and damaging sugar tariff and subsidy more seriously, if you had anything more than a casual dismissal of it and the assumption that nothing can be done without the agreement of the lobbies.

[Pangloss]

Fine, so you're just going to accept corrupt pork barrelling because it's backed up by a powerful lobby?

 

That's a pretty clear indictment of American democracy.

 

 

Fair enough, but your podium pounding won't clean up my back yard.

 

 

It isn't just the subsidies, remember? US sugar growing is so inefficent that it has to be protected by tariff barriers that keep US sugar prices almost double world prices. And even then the sugar growers still need subsidies to keep going.

 

Take a look at these figures

 

20.83 cents per pound, U.S. raw sugar price, May 2008

 

12.23 cents per pound, world raw sugar price, May 2008

 

(Sources: Cato Institute; U.S. Department of Agriculture)

 

Now, take a look at the ingredients on a can of your favourite non diet soft drink. In the US you'll see 'non fructose corn syrup'. In the rest of the world, you'll see sugar. That's because sugar is so artifically expensive in the USA (and non fructose corn syrup is NOT good for you)

 

If the subsidies and tariffs were removed the sugar industry would simply not plant any more sugar for the next harvest, it would stop.

 

On the contrary, Congress could simply agree to eliminate the sugar tariffs and the solution would be immediate. No court cases would take place, there is no legal basis to challenge the government removing a tariff. It's just a shame that Senators such as Obama are so much in the pocket of lobbyists that they opposed the US governments proposal to remove those tariffs this year.

 

You're preaching to the choir, and you haven't answered my question, which is why we should assume that such a removal of subsidies would immediately cause the Florida cane sugar industry to fail and its land revert to the state. You haven't made that case at all, but it is your contention that that's what would happen.

[Aardvark]

Fair enough, but your podium pounding won't clean up my back yard.

 

Nope, but Congress agreeing to the US governments proposal to end the sugar tariff this Spring would have done.

 

 

You're preaching to the choir, and you haven't answered my question, which is why we should assume that such a removal of subsidies would immediately cause the Florida cane sugar industry to fail and its land revert to the state. You haven't made that case at all, but it is your contention that that's what would happen.

 

The Florida sugar industry is dependent on the sugar tariff. Without the tariff the sugar would immediately become uneconomic to produce. There would be no more sugar planted for the next harvest. That would be an immediate consequence of the lifting of the tariff. According to the USDA Report (Haley, 2004) a lifting of tariffs would result in at least 70% of sugar being imported with the possibility of the complete disappearance of the US sugar industry altogether.

 

That is NOT to say that the land would immediately revert to the State, but it would immediately no longer be used for wasteful, water sucking, sugar cane. And the State would be able to buy it for a much lower price if it still wanted to.

 

 

It's pretty simple really. The Florida sugar industry relies on a tariff that keeps the price of sugar in the USA nearly double that of the world price. Without that tariff it is so uncompetitive that the planting would end immediately. If pointing that out makes me an ideological ranter then i'm happy to be one.

[Pangloss]

Thank you for answering my question. That's fine, unfortunately the tariffs and subsidies are firmly entrenched, with zero political movement in that direction. Both presidential candidates are talking about increasing protectionism, and most of the protectors of Big Sugar are Democrats, who are predicted to increase their control over Congress. These things spell a long road for removing those subsidies.

 

But my back yard gets fixed in six years, period. So I respect your opinion on it, and I admit you make some interesting points, but I think this deal makes a lot of sense.