Potato Industry Cracks The Door

Published online: Dec 23, 2003
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There may be a little crack in the door of the National Potato Industry's plans to back away from any connection with the nation's sugarbeet industry in regional trade agreements.

It came in an announcement made by the NPC that four of the five Central American Free Trade Agreement countries had agreed to immediate zero-duty access for frozen fries and dehydrated potato flakes into all countries except Costa Rica.

Nicaragua, Honduras, El Salvador and Guatemala negotiated the agreement with U.S. trade representatives December 19.

The NPC hoped the negotiations would also provide the opportunity to eliminate tariffs on fresh potatoes and dehydrated products, such as chips. Dehydrated potato products provide immediate duty-free access to Nicaragua, but are subject to a five-year phase-out in Honduras and a 10-year phase out to El Salvador and Guatemala. Fresh potatoes are subject to phase-outs ranging from 12 to 15 years.

In its news release announcing the negotiations, the NPC said is will evaluate the details of the agreement, along with prospects for subsequently adding an agreement with Costa Rica, Nicaragua, Honduras, El Salvador, and Guatemala for all U. S. potato products.

In addition, the NPC will evaluate the details of the agreement along with prospects for subsequently adding an agreement with Costa Rica.

After consulting with state potato organizations and other segments of the potato industry, the NPC will make a determination as to whether to support Congressional approval of the agreement.

Already potato/sugarbeet growers in Idaho, North Dakota and Minnesota have been discussing CAFTA, trying to analyze the impact of the potato trade agreement on the sugarbeet industry. Without the potato industry supporting the effort to keep sugar out of the trade agreement, any lost sugarbeet acres in the United States will probably be planted into potatoes, further overcrowding markets.

U.S. trade representatives want to include sugar in CAFTA. Doing so will open the doors for the CAFTA countries to dump over 2 million tons of sugar into the United States. This, according to studies, would drop the price of sugar to 12-to-14 cents a pound, making most sugarbeet production economically unfeasible.