Address at annual meeting, California Beet Growers Association by Frank A. Kemp, American Sugar Beet Industry Policy Committee

\

ADDRESS AT

ANNUAL MEETING

CALIFORNIA BEET GROWERS ASSOCIATION BY

FRANK A. KEMP

AMERICAN SUGAR BEET INDUSTRY POLICY COMMITTEE February

4, 1955

It is a singular personal honor and privilege to share a place on

your annual program - particularly at this time in the year

1955

-

a year of

very significant portents, although with differences among men as to what they

signify.

From a remark of one of my associates in the processing end of the

business, I was given an even better understanding of the great courtesy of the

invitation extended to me by your President, Arnold Frew, and your Executive

Secretary, Gordon Lyons.

This processor, who shall be nameless, heard me say that I had been

asked to appear at this meeting. "Hell, he snorted, they asked you, did they.

When they want me someplace, they tell me to be there." Perhaps the fact that

I do not operate this side of the Rocky Mountains gives me some innnunity.

It may also add freshness to my point of view. At any rate, I come

here -- after most of a lifetime in the beet sugar business -- possessed with

what I have frequently described as a passion for the industry, and with some

experience with its problems, large and small, internal and external, going

back of the Smoot-Hawley tariff of

1930;

afforded a first opportrmity to address

recognizable advantages upon which to base its very considerable influences.

There is no exaggeration when I say that I am deeply grateful for the opportunity

to appear before you, that I hope that I may add in some small way to an improved

understanding, that I may further cement our mutual interests in our common

enterprise. May I also say that I approached my task and opportunity with great

humility.

Among the blessings of your Association to which I shortly referred,

I said that you have recognizable advantages upon which to base your influence~

In the vanguard of those advantages I list your exceeding good fortune in the

personnel of your President, Arnold Frew, and your Executive Secretary, Gordon

Lyons. There are few, if any, men in the sugar business with as wide a range

of actual and active experience as Arnold Frew, or with better judgment, keener

understanding, or more distinction. That he is willing to devote as much time

as he does to his public service as your President, is an exceedingly fortunate

thing for you and for the whole industry.

My first meeting with Gordon Lyons was long ago; I believe it must

have been in the middle thirties, during that early and formative period when

3

-about, were on trial. As you well know, Gordon has played on the first team of

the industry from that day to this. He has service stripes that would reach to

the elbows of both his arms and a handful of medals, including a Distinguished

Service Medal with Oak or Sugar Beet Leaves, or whatever else might best

com-memorate a very alert and effective service in your interest.

May I say that you are also fortunate in your directorate. I met one

group of your people for the first time at a Washington meeting last summer.

They had not been present five minutes before the entire assembly was aware of

the contribution they were ma.king, and their right to a high place and high

respect in any council. They made a lasting impression on me.

With the possible exception of the capacity to raise hell, which

appears not to be confined to any latitude, people or climate, the ability to

raise sugar seems almost the world's most universal attribute. The fact is

that the two plants involved, sugar cane in the tropics and the sugar beet in

the temperate zones, are among nature's most efficient mechanisms. The student

of sugar,· if he is to understand its problems, must start with this fact. He

must understand that over wide reaches of the tropics, an acre devoted to cane

acre would produce if planted to them, and at the same time support a type of

society, master and peon, which seems to be permanently imbedded in many

La.tin-American cane areas. The sugar beet, on its part, makes a significant

contribution to solvent agriculture for which there is no substitute or

replacement over wide areas, in bringing to the husbandman the benefits of an

intensively cultivated crop, turning out a finished product on the one hand,

with the by-products ma.king possi)le a farm-feeding, soil-fertilization cycle

that produces an astonishing amount of meat and milk and restores to the soil

most of the plant food used by the beet crop.

Except for the war period, there has not been a time in my sugar

experience when it did not seem that the ability of the world to produce the

commodity was greater than the demand. Therein lies both the seed and the

,/ fruit of a problem, that today) in this year

1955,

has been brought home to

conf'ront and perplex the operator of every present and potential sugar beet

farm in this country, large and small.

If I talk about that problem this afternoon, you must understand

that I do so with the knowledge that what I say is known to most of you, that

every opportunity at which a group such as this can take time from other

interests to talk and think about the sugar problem, should not be overlooked,

and I shall not pass up the opportunity afforded me to speak about it.

What I shall say are largely my personal views. I submit them to you

to stimulate thought and comment, to bring about a better understanding of some

phases of the subject that often are hurried over, and to urge the industry in

this great state to the continued earnest exercise of its good judment and its

potent influences. Beyond all that, someone in the domestic industry had

better start talking or we will be judged by default.

The war ended with many of the participants in a state of near or total

exhaustion. Nevertheless, experience after the first World War demonstrated that

the recuperative power of the sugar industry, once set in motion, was very strong.

Back in

1946

it seemed to many people that the situations, the experiences, and

the needs of those most concerned in this market should be studied and an attempt

made quickly to develop a pattern and a program that would make sense, that would

be a reasonably fair and equitable compromise, that would call for what might be

/ termed a real community of sacrifice, that would fai ~

_,..

protect the interests of consumers, and which would be in the national interest of the country.

You will note that I mentioned prominently in this list the need of

compromise, of sacrifice by all. That need, of course, arose out of the readily

recognizable fact that if the Philippine industry were to be rehabilitated, as

seemed likely over a period of time, potential sugar production within the orbit

of the American market was definitely greater than any total demand of that

market up to that time.

Even then there arose in some quarters a hue and cry for foreign

pur-chases. Cuba, it was said, had magnanimously increased during the war its sugar

production at our request (there seemed then and now no willingness to credit

Cuba's altruism to the great profits which she made out of the business), and it

would be a shame, the same interests urged, not to allow Cuba time and opportunity

gradually to recede from the peak of production that she had climbed.

The domestic sugar-producing areas took a look at the records of their

own recent past, and without exception read from them too bearish a view of the

future; with not enough weight given to the fact that in this country there had

been a deliberate drive by the Government during the war by price support and

other means to switch land from sugar into crops like cereals and beans; that

to ride Patton's tanks; that the rebound of demand from sugar rationing would

be a very significant one.

At any rate, the domestic industrybelievedthen, exactly as it should

believe today, that part of the sugar demand of this country should be filled by

imported sugar and part by sugar domestically produced. And to the everlasting

credit of the domestic industry of that time, it participated and cooperated in

a most generous and forthright fashion with other sugar interests and our

Govern-ment in the measureGovern-ment of the compromise and sacrifice that the facts and

beliefs of the time suggested.

Unfortunately, the domestic people were not accorded in

1947

any share

whatever in the growth or progress of the country. We were given a fixed

quantity. We accepted it, although we made it clear that if circumstances

altered we would present the changed facts when the change took place. None

realized the extent by which the country would grow, the percentage by which the

population annually would increase. In the light of what has since transpired,

it is incredible that no provision was made that we should grow as the country

grew. After all, it is in part out of our own overall contribution as citizens

we ourselves have made possible. Foreign suppliers, receive as an unexpected

and unjustified windfall, every ounce of increased sugar demand.

From 1947, when the present quotas were enacted, to 1954, the sugar

market in this country increased about 1,050,000 tons. Except for 176,000 tons,

ceded to Puerto Rico and the Virgin Islands in 1951, every ounce of that increase

has gone to Cuba and other foreign suppliers, and unless the law be changed,

every ounce of all future increase in demand will further swell the foreign

share. At the same time, the domestic cane and beet areas, cut back in acrea,ge,

denied the right to improve yields except by further acreage restriction, plagued

./ by above-normal stocks in warehous~J look timidly over the fence and wonder, if

growth is good for Cuba, should it not also be recognized to be good for

Calif-ornia, and Idaho, and Colorado, and Louisiana?

But make no mistake about it, we owe, and the country owes, sincere and

determined allegiance to the broad principles of the,existing sugar program. It

has been, as President Eisenhower declared last year, one of the most successful

agricultural statutes. With the successive reductions in the sugar tariff that

have been decreed since the first sugar law was enacted, the modest tax still

the p8iYfflent t.o each

producer

l

largely

financed out of

the

tax

p

id

by the

sugar

he himself produced, and is in fact what was once described as

11

_{redivision of return}

ln

the trutustry." The Tre sury makes

net profl

t

from the sugar program - a

consideratten

not to be lightly regarded in

these

days of unbalanced natlooal budg~t.

The

pre ldent has

id

ore

than

once

that

he puts first. on his list

the

need to keep the United States

strong.

I have great confidence that be does not

intend. to lose sight of this for

any

rea on. If the United State is to

be

kept

strong,

its important industries

st be kept strong. Its agriculture must be kept

strong. Our

people

must be p·ermltted to make the most of their opportunltie • Men

making

homes

on Amerio

lands mu

t

h ve the right

to

grow

the

crops be

t

adapted

to the oil and climate.

These facts must be

recognized.

.And

if they

are, there

must be ome expan lon

of

the pre-sent restricted right to produce sugar

in

this

country.

Let me make

it

c

le

ar

ag

in, I believe

that

our sugar ne d should be

filled

in

part

by

foreign and in part

by

dom Uc

.suppliers.

As d.ome$tic

pro-dueers, vitally fntereate.d in What.

ts

best

tor

the country along with what

ve

foreign sugar. In the first meeting representatives of the beet industry

had with Secretary of Agriculture Ezra Benson, our spokesmen said that we

had accepted a solemn duty to view our beliefs as to sugar in the light

of the whole national interest as well as our own interest. I am proud

to say that we have fulfilled that self-imposed obligation to the hilt

and to this minute.

It is strikingly evident that there are many important influences

at work behind the sugar scene and on the sugar stage. Unfortunately,

close collaboration during the war between our government and all sugar

groups, including the Cuban sugar industry, has prompted some of the Cubans

to act as if they had acquired vested and preferential rights of citizens

of the United States. The so-called Wall Street Cubans have a large

publicity and propaganda staff actively at work. It is a new twist to the

trade perspective that investment in a foreign country and the desire to

enlarge profits on that investment would bring the investor into direct

- 11

-A recent circular from Cuba addressed to every Rotary Club in

this country requested consideration of a scurrilous propaganda piece

containing this choice message from a foreigner:

11_{It does not appear sensible to hurt the countless} concerns who have been able to make Cuba an excellent market for their wares and a solid source of money income, just in order to give additional advantages to a handful of already overprivileged sugar producers, artificially supported by a protective tariff plus subsidy payments;

* *

*."

That is an unprovoked aggression. The prejudice and falsity

which it discloses would make any responsible propagandist hang his

head. Naturally it raised the gorge of a lot of people in the domestic

sugar industry who more than once took Cuba's part - back in 1947,

again in 1951, and again in the development and effectuation of the

International Sugar Agreement.

Unfortu."'18.tely ·- a recent circular addressed by the same Cuban

interests to all county agents :i..n this country in the same vein is an

example - other publicity suggests that the quotation may be but a

refuse any sharing of the fortunate privilege that so accidentally fell int6 their·' laps.~ .. •'• .

The angry lament that rises in some quarters in Cuba on any suggestion

of reconsideration of the situation in which the American domestic interests have

been placed is intentionally misleading and unfair, among other reasons, because

it gives the inference that Cuba bas already suffered a grave loss of market

'because of increases in domestic production. That is not the fact. Let's look

at the record: The production of the United States beet industry was

1,802,000

tons in

1938

and

1,872,000

tons in

1953,

an increase of only

4~.

But let's see

what Cuba had done. Cuba produced

3,089,578

short tons in

1938

and

5,390,786

tons in

1953,

an actual increase of over

74~.

And what happened elsewhere? Great Britain increased her beet sugar

production from

1938

to

1953 14~;

Holland

111%;

France

9~.

Mexico, between

the same years, increased her cane sugar production

149',;

the Dominican Republic

45%;

Brazil

109%;

Australia

52$.

The simple fact is that the rest of the world supported its domestic sugar industries, although as a consequence Cuba was

deprived of some part of her so-called world market. Nothing is said by Cuba

about these competitive increases by other countries, but cries arise to the

high heavens at the slightest suggestion that some hope is to be held out to

the American industry.

There is no clear view of what lies ahead of us. The mainland cane

industry says it has been cut back 10 and then

f!/1,

in acreage; that in the light

of the size of its inventory on January l last, it can market less than 2CY{r, of

its

1955

production in

1955;

that its last three year average yield of cane is

nearly 13% higher than the three year average ending four years ago. It points

to the reasonable conclusion from these facts that it faces a still further cut

in acreage.

Our industry has increased its sugar yield per acre by around 2CY{r,

since the prewar period. We have been cut 'back in acreage from

1954

plantings

lCY{r, for the area as a whole, some states taking a cut of over 13%. Our January

1

inventory will permit sale of less than lCY{r, of the

1955

quota out of

1955

production. In many areas men on new lands, ma.king new homes, cannot get the

right to plant beets; in older areas acreage cutbacks endanger rotation plans,

You men and the other members of the California association set new

production records last year. To my knowledge no acreage of equal size in the

world ever attained so great a yield of beets or of sugar per acre. It was an

extraordinary record. It evidenced the benefits of fertile soil and a favorable

season. But it also reflected improvement in farming methods, application of

new skills, the adoption of scientific and research findings for which you men

and the industry alone are entitled t~ the credit. One of the most unfortunate

implications in the situation in which the beet industry finds itself, because

of the present quota provisions of the law, is that everything else being equal,

such a record of progress would have to be offset by a reduction in acres in

order that the fixed quota would not be exceeded. That would deny you and the

industry the ·benefit of improvement, the fruits of scientific progress. Is

there any American who would contend that this is right, that America can be

made strong by such restrictions?

Yet in spite of these appea.ling facts, there is a determined intent ~

in some high places to refuse relief, to deny even consideration of relief for

two years. I understand that on Thursday last a group of 26 senators and

n'amely, that this year, not

1956,

.

was the year to consider and act on Sugar I.aw

extension and revision; that Secretary Benson would be a good man to designate

as the right person to set in motion consideration of what should 'be done. I

understand that no attempt was made to present or urge substantive proposals.

I understand the President's attitude was interpreted as reasonably favorable

to these simple suggestions. ·Yet within a few hours the Eastern papers carried

big headlines screaming of a threat to Cuba's existence.

I have great hope that Secretary Benson, who has demonstrated his

complete dedication to highest principle, will not only interest himself in,

but with the consent and authorization of the President, will move forward to

find a sound, equitable, and forthright solution to all sugar claims. It has

been done before; it was done in

1947

under Secretary of Agriculture Anderson.

If the will exists it can be done again. For our industry I hope most earnestly

that we will contribute a sensible, moderate definition of our needs. I urge

this in the interest of the industry and of the nation.

One thing that people are only now commencing to recognize in the

1955

sugar model, is the conflict and contest that got into motion among us. For a

By this time it has been brought home to every beet-growing county. . It amounts

to the age-old problem, wherever and whenever there is less than enough to go

around, who gets what there is, the fellow old in the business; the man last

in1 I think I am right in saying that in the great bulk of the beet-growing

area the producers themselves reached the decision that long-time contribution

had to be given more weight than the most recent experience. If you stop to

think about it, the decision could hardly have been otherwise.

Yet those conflicts created difficulties among us, problems that we

did not deserve to have imposed upon our councils. We must be moderate, ·but

we must have a little elbow-room. And above all, we must appreciate that by

some measurements, we are a minority in the sugar industry, that we have little

outside allegiance, that we depend largely upon our own strength and the merit

_.

of our own case. Here in this great State of California, with the largest

acreage and production of any state, it may seem of little consequence to you

that the struggle for acreage might sound the death-knell of the industry in

Ohio, or in some other of the older and less productive areas. I can remember

when the Congressional interest in sugar beets in the State of Ohio, with four

supporting our industry's position. I have said many times that from the point

of view of the industry's own best interests, we should deeply regret that the

industry east of the Mississippi has declined in production, that a number of

the factories in that area have been closed down. I realize with everyone else

that yields are greater in the new irrigated lands of the Western Plateau, but

even if this be heresy in some quarters, I don't believe that the affairs of

the country would be improved if the man with one mule and a small cotton

acreage were to be forced out of the cotton business and told that his share

of the cotton needed could be grown more efficiently somewhere else. In any

event, if we are to live with restrictive quotas, we will have to deal with a

serious problem intelligently, moderately, and in good spirit. At the same

time, I think we must recognize that dilution of our total quota to take care

of new people can only be made if more room be provided. That is one of the

reasons why I have devoted a very great part of my time for more than a year

to the attempt to give the industry some leeway to make it possible to accommodate

_new people out of a somewhat larger share.

The basic position of the industry has had some real and very welcome

support; the National Reclamation Association, the Alllerican Farm Bureau

•

Federation, the legislatures of a number of Western states have passed strong

resolutions and memorials in our behalf, and there will be many more.

But there are not great numbers in the sugar 'beet industry. It is

not large. There are more congressmen from the five boroughs of New York City

than the total from the great part of the beet-producing area. We cannot ~ford

to disagree seriously with each other. OVer the years we have ·been

extra-ordinarily successful in staying with things until we arrived at a common point

of view. We must continue to do so. We cannot afford, unless a position is so

vital that it can not be accommodated to any other view, to have differences

among areas, nor between growers and processors, nor ·between growers, nor between

processors. There is no victory possible, not even certainty of continuity, in

that kind of confusion. It will take every ounce of cooperation,· every ounce of

restraint, every pound of effort, of which we are capable, to keep our business

right side up, on the right side of the ledger and with enough elbow room to

prevent stagnation.

I speak of this need to work together, the need to settle our differences

amicably if possfble, but to settle them regardless, because to me it is a

No living know with

eertalnty in

what dlreottca

we

are

heading.

Th

re

t

a.

very

active movement unde~ to

give foreign countries a share, or a greater share, of our market.

We are already doing that, in the case of

sugar..

A. very

large

part of the $Ugar market of thl s count.ey ts de!inl

ta:iy

and positively

ceded. to foreign suppliers.

Your si t.uation

in

Ce.Uforni h s element.a- of

dlfferen~

from condltlons in

other

area • You hw1d be able, out of the

grants ef

dis

_

ereti.on

in the

1 ,

to work

them out

adrdnl

st.ratively ..

At least l would hope that could be done,

ther

than

that time and

eftor.t be spent on discussion

and

po$ Ible aendments that might be

by-passed. in a very posl Uve contribution to the p0sslble success

But to go back for a moment to the .American sugar system, the Cubans

themselves think very, very well of it. Within recent weeks the well-known

/ brokerage firm of Luis Mendo-z• and Company of Havana had this to say:

"We are extremely lucky that such a quota system exist~, as

otherwis·e domestic beet and cane producers and Puerto Rico

woll1d be dumping half a million tons more in the .American market, and Peru, ·Formosa, Indonesia and all other sugar

exporting countries would compete with us in the

U.

s.

market causing Cuba's financial ruin."

The fact is that there is no single interest that has not been benefited by the

law, including that most important person without whom there would be no market,

the American conswner. Let us never forget to make it our duty to see that his

reasonable interests are fully looked out for.

There is cme other war cry I make every time I have the opportunity and

that is to sound my conviction that this country must see to it that we maintain

a solvent and prosperous agriculture, with conditions on the farm that will

prompt men and women to make their homes on the land, conditions that will

pro-vide them with more leisure, more opportunity and more time for the education of

their children, more satisfaction for the whole farm family. All that must be

achieved for the proper livelihood of our cities, our enterprises, all industry.

No .one should make any mistake about it, unless agriculture is solvent and

- 21

-In a very real sense I have learned to subordinate personal views for

what I have believed to 'be the view of the industry. On every occasion on

which it has fallen to my lot to act in a representative capacity for the sugar

beet business, I have tried faithfully to represent it and its opinions. You

can tell from what I have said that I have built up a rather strong feeling

on the quota. problem of the industry. In a very considerable part my feeling

is in natural reaction to what seems to me to be unreasonable and unwarranted

opposition from some people to any consideration of our situation. I believe,

and I urge you to believe, that as the very essence of the American sugar

system is restriction in all directions, we must ourselves accept restriction,

and we.must be moderate in our definition of our need. If we are moderate, I

hope that our claim will be honored. ·

If so, we can look to the future with real confidence. We can

resolve our own internal problems in large measure; certainly we can attempt

to resolve them in good spirit. We can breed still better seed;. still further

improve yields; cut farming costs; increase feeding gains and lower feeding

costs; continue mechanization so t h a t ~ t h e ~ and the dignity of the

- 22

-to provide users of them with the variety and the service they require and want.

The industry should continue to pay fair returns to the people who grow the beets

and to those whose money is invested in the properties; continue to bear its fair

share of American taxes; build its part of the roads; provide steady and desirable

employment.

Here in this great State of California you have perhaps a larger share

of the good things of life than in almost any other place. Those advantages have

naturally attracted out here over the decades behind us adventurous and able

people. As our largest sugar-producing state, you should bear a very conside.rable

part of the burden of effort required in the industry's behalf. I want you to

know that the people who live where I come from want to work with you in our

common interest. We look forward to the development of an increased confidence