Government provides a sweet deal for the Fanjul family

By Laurie Bennett

August 13, 2009 at 10:50am

Several major American food companies have written to Agriculture Secretary Thomas Vilsack, saying they may run out of sugar if import restrictions aren’t eased.

Manufacturers are limited in the amount of tariff-free sugar they can import. As a result, domestic sugar prices are double world levels, which have soared as consumer demand outstrips supply.

The manufacturers’ claims, while disputed by some economists, reflect the critical role government plays in the U.S. sugar industry. While farmers growing crops such as wheat or corn rely on federal subsidies, American sugar producers benefit from import quotas.

One of the largest beneficiaries over the years has been the Fanjul family in southern Florida.

The Fanjuls own Florida Crystals Corporation, a privately held company that last year saw revenues of $3 billion, according to The New York Times.

You’re likely to have more than one Fanjul product in your kitchen cupboard. The family owns Domino Sugar and C&H Sugar, and sells to national retailers such as Wal-Mart and Kroger.

The family headed a sugar empire in Cuba, fleeing when Fidel Castro took power. The four Fanjul brothers have rebuilt their dynasty in the U.S. through aggressive acquisitions and government help.

The family has worked hard to maintain good relations with the party in power. Florida Crystal’s parent company, Flo-Sun Inc., has already spent $355,000 this year on lobbying, according to the Center for Responsive Politics. Last year’s lobby costs totalled $715,000.

Family members also have been big campaign donors, contributing to candidates in both parties, and to PACs representing the sugar industry.

Their political involvement, and their profits, are likely to come under scrutiny in coming weeks as the administration contemplates next steps.

The last real federal review of the sugar program - by the GAO during the Clinton administration - found that it cost consumers $1.9 billion a year. Domestic sugar producers were reaping half of those funds, the report said.

While the Fanjuls are rich and powerful, the companies writing to the USDA also wield significant clout. Signers of the letter include ConAgra Foods, Hershey, Kraft, Krispy Kreme, Mars and Unilever.

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