A month or two removed from a decent but expensive sugar cane harvest, Louisiana cane farmers learned Tuesday that the LSU Agricultural Center they rely on could once again lose funds if the state’s revenue shortfall isn’t funded.
Gov. John Bel Edwards told farmers at the annual American Sugar Cane League conference in Lafayette that funding cuts for the LSU AgCenter, which is part of the LSU system and oversees agricultural stations and programs across the state, would be tied to cuts in higher education.
“The state of Louisiana is in one of the toughest spots it’s ever been in. There is no sugarcoating it,” Edwards told farmers, pun intended.
Edwards said Louisiana’s estimated budget deficit for the next 17 months is $2.65 billion: $750 million for the remaining five months of this fiscal year and $1.9 billion for the 2016-17 fiscal year that starts July 1. And those figures could grow as the weeks pass, he said.
Edwards said his administration is proposing an extra 1-cent “clean penny” state sales tax that could go away at a later date and the elimination of some tax exemptions to help finance state government. Edwards said the 1-cent sales tax would not be charged on purchases of groceries and prescription drugs or on residential utilities.
Edwards said former Gov. Bobby Jindal, who left office in early January, was responsible for “dishonest” budgets that ran short of revenue eight straight years.
Legislators will try to iron out budget solutions at a special session that starts Feb. 14 and ends March 9, a few days before the regular session begins March 14.
The governor spoke to hundreds of farmers and industry officials gathered at the conference. Edwards said the speech contained the same budget warnings as two he gave last week to the Louisiana Oil & Gas Association in Lake Charles and the Southwest Louisiana Economic Development Alliance, also in Lake Charles.
Edwards didn’t specify how much could be cut from the LSU AgCenter budget. He said the public universities have withstood hundreds of millions in cuts during Jindal’s two terms.
Unlike the universities, the LSU AgCenter did not draw any money from the raised tuition and increases in student fees implemented to mitigate the cuts to colleges, Edwards said.
Now the state’s 465 cane farmers may have to deal with losing some of the services provided by LSU at stations across the state, said Jim Simon, general manager of the American Sugar Cane League.
Simon said cane experts working for the centers develop the varieties of cane planted and grown in Louisiana. Cane crops are replanted using cane stalks, Simon said; there are no for-profit agriculture corporations that develop seeds for the industry, unlike crops like rice and soybeans.
“Sugar cane varieties are developed in the public domain,” Simon said, explaining that anyone can walk into an AgCenter station and receive the information.
Louisiana cane farmers this past harvest were able to haul in a decent crop of about 1.4 million tons of raw sugar. But rain in spring 2015, drought in the summer and more rain from mid-October on made conditions miserable. And more expensive, including for increased diesel burned by farm machinery trudging from the mud and increased labor costs.
Simon said the rain during the fall and winter, which continues to fall, could make the 2016 harvest rough, too. Farmers have to repair fields that were rutted by machines slogging through the mud, and they’re having to drain areas that are retaining water, which adds to a crop’s direct costs.
There has been some relief, such as the 24 cents or more they got per pound of raw sugar. The price was up from previous years, when Mexican sugar flooded the U.S. In September, the U.S. International Trade Commission ruled that Mexico “dumped” millions of tons of its government-subsidized sugar in the United States, a ruling that effectively stopped the practice for five years.
Agriculture economist Jim Wiesemeyer, a senior vice president with Informa Economics, said Tuesday that U.S. cane farmers should work to extend the ruling beyond five years.