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Critics question beet subsidy motives

  • Proponents of the sugar beet subsidy point out that the crop can provide stability for farmers.

BEIRUT: The government has renewed an agricultural subsidy on sugar beets that was revoked 12 years ago, but critics are questioning the timing and whether the bulk of the support will reach the embattled farmers or benefit vested political and economic interests. Last October, the Agriculture Ministry announced it would introduce a $17 million subsidy to stimulate sugar beet production in 2013 by paying small- and medium-sized farmers LL175,000 per ton for the crop.

Though Lebanon’s agricultural sector is desperately in need of government support, the head of the Lebanese Farmers’ Association, Antoine Howayek, said he feared that the temporary return of the subsidy would do little to boost an ailing industry in need of more sustained government assistance.

“The farmers need support,” said Howayek. “But the government doesn’t try to find a better crop to target. It’s all very political and there is a lot of corruption. We can use all the [$120 million] they spend annually on subsidies to solve all the agricultural problems in Lebanon.”

Proponents of the sugar beet subsidy, such as the owner of Lebanon’s only sugar processing plant in Anjar, Raeef al-Kassem, argue that paying farmers a set price for a crop that can be produced, processed and sold in Lebanon will insulate struggling farmers in the Bekaa Valley from huge price fluctuations of commodities like potatoes and animal feed on the global market.

It will also minimize their vulnerability to blowback from the Syrian conflict which has blocked farmers’ access to trade routes into Lebanon’s main Arab export markets.

Advocates also argue that the limit on how much land can be cultivated under the subsidy will ensure that it will benefit low and middle-income farmers.

“At the end of the day farmers know they will get a fixed price for their product,” Kassem said. “But what’s most important is that these beets are delivered in the Bekaa and processed in the Bekaa, so it doesn’t have to be transported by truck through Syria to other Arab countries.”

Kassem, whose factory has been closed since 2005, said he would not benefit directly from the subsidy, but would buy all the beets produced by the farmers at wholesale price from the co-op and process up to 3,000 tons per day into sugar-based products like alcohol, molasses and animal feed, which will then be sold at the market rate to retailers.

The high costs of production associated with sugar beet processing outweigh any benefit Kassem receives from buying the raw materials at an artificially low cost, he said.

Nada Nehme, a board member of Consumers Lebanon, is opposed to the reintroduction of the beet farming subsidy because she believes Lebanon’s agricultural sector needs state support targeted toward more specialized crops that do not require as much water as beets and due to the way the subsidy has been implemented in the past.

“We had a lot of corruption in the distribution of the subsidy before, because the crops were bought from the farmers at a low price and sold to the market for a higher price,” she said. “Our opinion is that we need a way to distribute the produce directly from farmer to consumer.”

Another opponent of the subsidy from the agricultural sector who refused to be identified leveled more serious allegations of corruption at the parties responsible for channeling the government funding before the subsidy was revoked in 2001.

“They used to sell authorizations to plant the beets to the farmers,” he said, in reference to how officials handled the subsidy in the past. “Then they sold beets to the factory at a lower price. It was a giant mafia. Now they say it will be more transparent but we won’t know until August or September when the harvest is finished.”

Salah Hajj Hasan, an adviser to the agriculture minister, dismissed preemptive charges of corruption.

“By law the body which is between the government and the ministries is the cooperative of sugar beet growers,” he said in response to charges that subsidy licenses had been sold.

Under the current subsidy distribution plan, a committee composed of representatives from the Agriculture and Economy ministries and representatives of the co-op will evaluate applications from farmers and determine who will receive a subsidy license.

The recipient will sign a contract with the cooperative and Kassem to sell beets to the sugar factory at the price set by the Economy Ministry based on the cost of labor, land and fuel since beets require perennial irrigation, requiring farmers to use water pumps.

“This process has to be managed and organized so as many farmers as possible can benefit from the subsidy,” Hajj Hasan said.

He insisted that the decision to reinstate the subsidy had nothing to do with the upcoming election.

“This is a request that farmers have been making for a long time,” he said. “And we are subsidizing a strategic crop that you can produce, process, and market and sell in one country.”

Supporters of the beet subsidy argue that revoking it in the first place in 2001 was a political move. The government pledged to get rid of all agricultural subsidies in return for $500 million in soft loans at the Paris I Donors’ Conference in 1998, but only the beet subsidy was revoked.

“It’s not why did the ministry decide to [reinstate it now], it’s why did they wait so long,” said the general director of the Cooperative of Sugar Beet Farmers, Said al-Mais. “The government [of then-Finance Minister Fouad] Siniora said we are against subsidies and farmers should depend on themselves, but they only stopped it for sugar beets. They said you are not permitted to stop tobacco subsidies and of course the government didn’t.”

He wouldn’t specify who “they” were, but said, “Tobacco is planted in the West [Bekaa] and Baalbek. That means they are planted in places that are related to some politicians.”

Both sides of the debate agree that the subsidy will do little to accomplish Agriculture Minister Hussein Hajj Hasan’s stated objective of ending hashish farming in the Bekaa in the short-term since most of the farmers who will benefit are in the north.

Mais said it took about three years for the subsidy to make a noticeable impact in the north when it was reintroduced after the Civil War.

“Look in 1992 or 1993, we started replacing hashish with beets in a village called Al-Qasr,” he said. “Within three or four years we reached 70,000 dunams of beets instead of hashish. Many people are afraid to start planting beets now. If we have an election after three or four months and have another government, nobody is sure that the government will keep the subsidy in place. But if it stays for three or four years, it will make a difference.”

 
A version of this article appeared in the print edition of The Daily Star on February 28, 2013, on page 5.
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