Sugar Policy Remains Key Point In Farm Bill Discussion

Sugar prices continue to fall, which the Sugar Alliance says should prompt support for 'no-cost sugar policy'

Published on: Nov 30, 2012

The American Sugar Alliance is increasing their effort behind a call to retain sugar policy in a new farm bill.

The group, which supports the current policy of tariffs on foreign sugar to encourage higher prices for domestic sugar, says it's a win for sugar producers and a win for consumers. Those who oppose the policy insist that it would drive manufacturers out of the country in search of lower sugar prices.

ASA Chairman Ryan Weston said this week in an ASA newsletter that the current policy, which was upheld this summer in Senate talks surrounding the farm bill, should be retained, citing record low sugar prices and big surpluses.

"The Big Candy lobby has complained of high sugar prices on Capitol Hill for months despite their own increasing profits," Weston said. "Now they have big profits, cheap sugar, and a rosy outlook for the future, so lawmakers will be much less receptive to their poormouthing."

Sugar prices continue to fall, which the Sugar Alliance says should prompt support for no-cost sugar policy
Sugar prices continue to fall, which the Sugar Alliance says should prompt support for 'no-cost sugar policy'

With a large surplus, strong domestic crop and foreign sugar still entering the U.S. market, ASA says raw sugar prices dipped in October—and is expected to trend that way in the "foreseeable future."

Weston says this is an indicator of how well the sugar policy is working – low prices are a benefit to consumers, and the U.S. is enjoying ample product.  Weston says the cost of the policy is another added benefit.

"Our policy doesn't cost taxpayers a dime. It helps counter subsidies by foreign competitors like Brazil, which controls nearly half of the world dump market. And it ensures consistent homegrown supplies at consistent prices," he said in the newsletter.

The Coalition For Sugar Reform, however, remains unconvinced. The group, which represents food and beverage manufacturers, trade advocacy groups, think tanks and government advocacy groups, launched a campaign Nov. 13 to address ASA claims.

The campaign, "Unwrap the Facts," says it is true that raw sugar prices have fallen, but they say prices for refined sugar are above historical norms. They note also that the 2008 Farm Bill led to "distorted markets, short supplies and incentives for businesses to locate food production offshore."

Those jobs – from manufacturers and farmers on both sides of the argument – are a key disagreement. CSR says the jobs are lost because manufacturers move outside of the country to find cheaper inputs, while ASA says lack of a policy could put farmers out of work.

In a Daily Caller opinion column published online this week, Rep. Tom Rooney, R-Fla., went against CSR comment and said the sugar policy has his support as the "best line of defense against an OPEC-like market that threatens our food security and 142,000 U.S. jobs."

Rooney said Brazil controls nearly half of the global sugar market and exerts pressure on price, and "relentlessly pushes" for more market share.

"The policy we have chosen — placing tariffs on imported sugar — guarantees imports into the U.S. market (America is the world's biggest sugar importer) but keeps subsidized foreign oversupplies from bankrupting U.S. producers. And, it operates without a federal budget outlay, which means it doesn't cost taxpayers a dime," Rooney said in his article.

"True, this policy isn't perfect. But it's necessary," Rooney concluded.

Click here to learn more about the sugar debate.