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July 2004, Volume 10, Number 3

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Coca, Sugar, Brazil

Coca. Colombia had a peak 400,000 acres of coca in 2001, but acreage has since plunged by 80,000 because of US-financed coca eradication efforts that have totaled over $3.2 billion since 2000. The US estimates that 835 metric tons of cocaine were produced in the Andes in 2003, down from 2001's peak production of 1,155 tons. US demand is estimated at under 300 tons a year, so the price of cocaine remains low, under $20,000 a kilogram in most US cities, but US officials say that their spraying of Colombian crops has finally offset the balloon effect of destroying coca in one region, and having it appear in another. Critics say that there is still a balloon effect of spraying, and that it is fragmentation- growing very small plots of coca in plots too small to see or spray-as well as increasing yields.

Sugar. Sugar is one of the most highly protected commodities in Europe and the US. The EU, which offers producers high prices and uses quotas to limit production and high tariffs to block out cheap imports, in June 2004 proposed to reform its $52 billion a year sugar subsidy program by cutting the guaranteed price by a third and reducing the production quota from 17 to 15 million tons a year. The EU and US producer prices are often three times the world price of sugar.

Mexico's five million tons a year sugar industry supports five million Mexicans- 150,000 growers, each with about 10 acres, supply cane to 60 mills. Cane cutters earn about $2.50 a ton, and harvest about seven tons a day. To preserve the demand for Mexican sugar in the face of cheap US high-fructose corn syrup, Mexico imposed a 20 percent tariff on soft drinks made with corn syrup in January 2002; Mexico says it will remove the tariff if the US allows free trade in sugar. Under Nafta, there is to be free trade in sweeteners by 2008, and free trade is expected to have Mexico importing corn syrup and exporting sugar.

Brazil. US farming newsletters regularly carry articles about Brazilian agriculture, emphasizing the low cost of producing crops such as soybeans there, and worrying about growing competition from Brazil in export markets. Brazil is the world's largest exporter of sugar, coffee and orange juice, has the largest commercial cattle herd of 170 million, and in 2003 surpassed the US as the world's largest soybean exporter.

Brazil is the world's largest producer of ethanol, made from sugar in Brazil and corn in the US. The US has a 54-cent-a-gallon tariff on ethanol imports, and Minneapolis-based Cargill proposed to build a dehydration factory in El Salvador to convert Brazilian ethanol for use in American cars. Under the Caribbean Basin Initiative, up to 230 million gallons of ethanol can enter the US duty-free each year.

Brazil's grass-fed beef is becoming the preferred meat in many countries worried about mad-cow disease, and Brazil is poised to overtake Australia as the world's leading beef exporter. The U.S., Korea and Japan, have barred imports of fresh Brazilian beef, citing health concerns.

Zimbabwe. The government in June 2004 announced a plan to take control of farmland, abolishing all deeds, and giving crop land to farmers under 99-year leases (25-year leases on wildlife conservancies). The government has already confiscated more than 42,000 square miles of formerly white commercial farmland and game reserves, and only about 500 of the original 5,000 or so white farmers still own farm land.

Land confiscations begun in 2000 have ruined the economy. The government says that Blacks resettled on previously white owned land have failed because they could not get loans without title to their land. The 99-year leases are to allow banks to provide loans, but critics said that there would few loans made because the government can withdraw the leases whenever it wished.

The government is predicting a bumper crop of corn in 2004 and telling the U.N. World Food Program to leave the country. Cornmeal is typically boiled into sadza, a stiff, sticky mush that is served with a side dish or, for the poor, often is eaten by hand as the main meal. Corn production fell from two million tons in 2000 to 800,000 tons in 2003.

Australia. Menegazzo Holdings became the world's largest cattle ranch in May 2004, with 435,000 head of cattle on 24 properties covering 10 million hectares.

Robyn Dixon and Peta Thornycroft, "Minister Says Zimbabwe Plans to Nationalize Land," Los Angeles Times, June 9, 2004.