SYDNEY - Who could have guessed that sugar would sour Australian politics? That's just what is happening as the Howard government gears up for its toughest national election yet.
Even as Prime Minister John Howard battles critics over his strong support for continuing Australian troop action with coalition forces in Iraq, and for pursuing terrorists in the Asia Pacific, not to mention such homegrown scandals as huge waste in the defense forces and the national telecom company, he is slammed on the very thing for which he has criticized other countries - distorting global trade through farm supports.
A bitter battle over sugar follows a trade deal with the United States that both Washington and Canberra politicians have still to legislate. After all the ballyhoo that greeted a recent breakthrough in trade talks, one little item in the deal has emerged to sour bilateral relations and domestic politics. Sugar, the too-hard item left out of the deal, is now giving Howard a bitter aftertaste.
The sugar fiasco comes as a shock to the average Australian. Most Australians live in half a dozen cities and earn a high living standard from service industries. Few venture into North Queensland, where the ups and downs of 6,000 sugar cane growers determine whether local communities live well or poorly. Those rural locals, stunned by a Howard rescue package, now threaten to take electoral revenge for what they say is the harm done by Canberra's bowing to Washington's whim.
In the U.S., a lobby known as the sugar mafia regularly funnels funds into willing Capitol pockets. Inefficient farmers in the European Union have distorted world agricultural trade for decades by overproducing subsidized meat, dairy and sugar.
EU sugar subsidies are estimated to have depressed global prices 15 percent. Efficient cane growers in Brazil and Australia, members of the Cairns Group within the World Trade Organization, have launched legal action against the EU, a process Europe will drag out for years.
The American sugar mafia made sure that U.S. President George W. Bush got its protectionist message before he went into trade talks with Howard. That message was not lost on trade negotiators from both sides. The subsequent free trade pact, the first between the countries and a cause for widespread jubilation in Australia, quietly dropped references to sugar.
As soon as Australian farmers read the fine print, they let out a mighty howl. All right for Australian manufacturers and American investors to get better market access, they complained, but how about us? Our beef producers will be effectively kept out of the U.S. meat market for 18 years and cane growers seemingly forever. "Treachery" and "dudded" were words Howard's coalition government did not want to hear, especially in this election year.
Flying up to Bundaberg, a Queensland sugar town, Howard unwrapped a Dollars 440 million, four-year save-sugar package. Farmers who walk away from their perennial problems will get Dollars 100,000 each. Community schemes that break into non-sugar projects will get Dollars 146 million. A one-off grant is earmarked for sugar mills to become more efficient.
To head off a taxpayer backlash, Howard explained: "It's hard being in sugar. Prices are low and subsidies from countries like Brazil are massive. We couldn't get anything for growers in the free-trade agreement because the American sugar industry is in the same situation."
But nobody cheered. "Sugar farmers were dudded," announced Labor leader Mark Latham, smelling an election rout. Cane Farmers Association president Ross Walker complained that much of the industry will die within a year unless export prices rise.
Taxpayers are growing more restless, urged on by newspaper editorials like The Australian's: "Howard extracted Dollars 22 from the pocket of every Australian, young and old, and handed it to 9,000 sugar farmers." The national daily warned that nothing can save the industry in its present form and that pork-barrelling among the coalition Liberal and National parties will only discourage needed reforms.
City dwellers are less than keen these days to spend more tax dollars on saving indigent farmers. They've seen it all before. Besides, some blame cane growers for polluting coastal waters, thus threatening the world-famous Great Barrier Reef. Fertilizer spread over cane fields ends up on the reef, encouraging the growth of the noxious Crown of Thorns weed that is believed to be destroying coral off such renown tourist resorts as Cairns.
The critics have chosen a bad time to dump on farmers. Much of Australia is in the grip of a crippling drought. Farmers are committing suicide or walking off the land. The Bureau of Meteorology warns of another El Nino. A couple of seasons back the warm current El Nino triggered a drought that destroyed crops and livestock, cutting 1 percent of national economic growth at a cost of Dollars 7 billion.
If this season's national grain crop fails, as is looking daily more threatening, city sympathy may be squeezed for special farm handouts. But it takes a wily politician to balance pragmatic priorities in an election year. Howard is such a one.
However, toss politics into the sugar bowl and the reaction is unpredictable. Renegades in the six "sugar seats" of Federal Parliament are talking of breaking away from coalition partner National Party and forming a new political party.
Rogue Parliamentarian Bob Katter, himself an independent after resigning from the Nationals, says he would be inclined to direct preference votes to Labor in marginal seats if opposition leader Latham fights the U.S. trade deal.
Of six sugar seats in Queensland and two in New South Wales, Labor believes it has a good chance of winning four. Throw in a breakaway conservative party, which Katter is expected to announce within weeks, and these two states could well be lost to the government.
With Labor growing more cocky daily under its new leader, Howard cannot afford to take the sudden sugar explosion lightly He has announced he will take a second look at his rescue package.
The irony is that the U.S. free-trade agreement is already looking good, even before both governments approve it - better, in fact, than both Washington and Canberra had trumpeted earlier. A Canberra think tank, the Center for International Economics, estimates gains from the deal at Dollars 6 billion a year a decade after it starts. This 50 percent rise on an earlier estimate is due mainly to a forecast more generous outcome in farm trade.
Tell that to voters in the six angry sugar seats. Promises of good times flowing from global negotiations is all pie in the sky to them.
An election only months away certainly focuses the minds of global-minded politicians, even for domestic issues that sound like the tail is wagging the dog. Expect a few surprises from Canberra any day soon. Australians may be enjoying a record-breaking economy, but for voters in key marginal seats to be made happy and stay loyal to the coalition, the Howard government will have to revise at some cost a few of the reforms that led to present prosperity.
Alan Goodall is former Tokyo bureau chief for The Australian newspaper.Japan Times:
