The algae fouling South Florida beaches traces its origin to sugar cane farms of Lake Okeechobee. A vast area drains into Lake Okeechobee, where water laden with phosphorus has fertilized the growth of horrific algae blooms that have been discharged to the ocean. The target phosphorus level for the lake is 105 metric tons a year. Last year, the lake received 450.
The problem has been building up over decades, and defies easy solutions. However, along comes La Nina this October with 10 named hurricanes and four major ones to flush the great green glob out to sea.
The eastern half of the U.S. lucked out last year with a below-average Atlantic hurricane season—only four such tempests, compared to the historical average of six.
But with models forecasting the development of a strong La Niña, 2016 could ring in a higher number of hurricanes, delivering the usual problems like beach erosion and urban flooding.
Forecasters expect El Niño to perish sometime in the spring or early summer. La Niñas often, but not always, follow El Niños, and it’s that possibility that prompted NOAA yesterday to issue a “La Niña Watch” for late summer or early fall. If it does materialize, it’d mean the Atlantic would have weaker wind shear—or changes in the direction and speed of wind thousands of feet above the sea—which would give hurricanes an easier time forming.
The ‘Invisible Hand’ of La Nina Ends Subsidized Sugar
Imagine you own a business that sells an unprofitable product. But you’ve done me favors in the past and I expect you to do me more in the future, so I decide to lend you the money your business needs to stay in operation. Should you find that you can’t pay me back, you needn’t worry, I’ll take a massive shipment of your unprofitable product instead. Of course, I’d rather not deal with that headache, so I go to great lengths to make sure that your lower-cost competition is at a disadvantage, thus ensuring a market price for your product that will be sufficient to repay my loan.
Heads you win, tails you win!
It may sound crazy, but that’s exactly what the Department of Agriculture (USDA) does to protect a politically powerful cartel of domestic sugar processing companies. It is a mind-numbingly complex arrangement that would have made a Soviet central planner blush. But the sugar lobby has successfully bought off enough politicians to keep the gravy train rolling for decades. Its latest defender: Republican presidential aspirant Marco Rubio.
WHAT IS A SUBSIDY?
Subsidies were developed to help a farmer make up money lost between the cost to produce a product and what he could sell it for. For example, if it costs $1 to grow a bushel of corn, and the market will pay only 80 cents, the government makes up the difference and pays the farmer 20 cents plus a little more so he can make a profit. [/one-third-first] [one-third]
HOW IT WORKS FOR SUGAR
- Each year, the Agriculture Department lends money to sugar cane processors to operate factories and to pay sugar growers for the cane or beets they deliver to the refineries. 2. In return, processors agree to pay growers set minimum prices.
3. If the market price of sugar rises, processors sell their product and pay back the loan.
4. If the market price falls, processors can forfeit the sugar to the government and not repay the loan. [/one-third] [one-third]
THE ROLE OF TARIFFS
- To keep from getting stuck with a bunch of unpaid loans and tons of sugar to distribute, the government uses tariffs. Sugar is much cheaper on the world market than in the United States. The government sets quotas on how much foreign sugar can be imported into the country. By keeping out this cheaper sugar, the government keeps sugar prices higher in the United States. [/one-third] http://abastomedia.com/en/news/unsweetened-road-to-the-u-s-for-mexican-sugar/
It also restricts the total amount of sugar that domestic processors can sell by setting “marketing allotments.” These too are intended to drive up the price by creating an artificial scarcity. According to law, each year the USDA sets the overall amount of sugar that can be processed for domestic sale at “not less than 85 percent of the estimated quantity of sugar for domestic human consumption for the crop year.” As Figure 1 shows, a cartel of 14 processors share the allotment, with the top 5 receiving 63 percent of the total for Fiscal Year 2016. http://reason.com/archives/2016/01/15/marco-rubios-sweet-protectioni
There is no economic defense of the sugar program, which every year provides non-recourse loans to sugar processors at a guaranteed price-per-pound. If the market price is below the guarantee when they want to sell, the processors simply dump the crop on the U.S. Department of Agriculture as the loan repayment. To avoid that outcome, the USDA holds sugar prices artificially high by imposing tariffs on imports above an annual quota. The result is that Americans pay about twice what the rest of the world pays for sugar.
The Coalition for Sugar Reform, which includes businesses that use sugar, says that for every U.S. sugar-growing job saved from high U.S. sugar prices, about three American manufacturing jobs are lost. The U.S. candy industry has been hollowed out as companies have fled to places like Guatemala and Thailand where they can remain competitive by buying sugar at world-market prices.
La Nina Cleanses the Sins of the Aristocracy
Big Sugar Subsidies do nobody no good save the political establishment, the elites, the Bourgeois. The environmental degradation is far beyond Mother Nature’s tolerance levels. Along comes La Nina, sending at least one Katrina sized hurricane to flush out the phosphate algae bloom of Lake Okeechobee before the November Election.
When hurricane Floyd sent the pig shit down river in North Carolina, they moved the pork packer lagoons to Texas and Oklahoma. That was North Carolina, Katrina washed away the ghettos of New Orleans. La Nina hurricanes will flood the homes of the Big Sugar Oligarchy in Palm Beach and Miami.
The 2016 big green glob will spare neither the Bourgeois or the Proletariat of Palm Beach-Miami-Naples. This time Hank Inside Job, Paulson, the single most important person responsible for the economic meltdown of 2008. Henry Paulson, Palm Beach bred, former Goldman-Sachs CEO, multi-millions conservationist contributor will blame La Nina for Apocalypse 2016. Hillary or more likely Trump (his golf resorts covered in slim) will avoid blaming the sugar cane growers for the mess but Bernie’s Millennials, armed only with smartphones will overthrow the Big Sugar cartel on social media,