Another sweet deal for Big Sugar?
Environmentalists are ecstatic over the state of Florida’s announced purchase from United States Sugar of a vast tract of land — 187,000 acres — abutting the Everglades National Park.
For years, groups have opposed the Florida company’s sugar cane production as a major contributor to Everglades water pollution. The announced deal, for $1.75 billion, would amount to about $350 per share, much higher than two previous offers for the company and its land. It’s expected that under the deal, the sugar company will continue operating for six years without paying rent or taxes. According to reports, the state would issue bonds and add to water fees to pay for the purchase.
U.S. Sugar is the largest sugar cane producer in the U.S. and has become almost synonymous with Big Sugar. It was formed in 1931 and is a privately held, employee-owned firm.
According to an article in the Sun-Sentinal, U.S. Sugar will be going out of business based on the long-term outlook for sugar cane and the possible erosion of its heavily protected status in the U.S. The U.S. sugar program restricts domestic supply, supports prices for sugar producers, and limits imports in a complex system. However, the program is increasingly under attack, and a greater amount of imported duty-free sugar is or will be allowed into the U.S. under several bilateral and regional free trade agreements.
Other observers have said that the state is paying too much and will be bailing the company out of debt and possibly getting it out from under an employee lawsuit over the share price provided to them.