April/May 2017: Dateline Washington

2018 Farm Bill: Hearings have begun in both the House and Senate Agriculture Committees on the new Farm Bill. The House Subcommittee on General Farm Commodities and Risk Management held a hearing on April 4th that included views by the domestic sugar industry. Jack Roney, Director of Economics and Policy Analysis for the American Sugar Alliance presented testimony entitled “U.S. Sugar Policy: Why We Have It and How It’s Working”. The message to Congress had six key points.

1. The U.S. is a major player in the world of sugar. We are the fifth largest producer, the fourth largest consumer, the third largest importer.
2. The American sugar farmer is extremely efficient. We are the 20th lowest cost producer among the 95 largest producing nations around the world. We are not the lowest cost producer because we have much higher labor, safety and environmental standards than most competitors around the world.
3. We provide consumers with high quality sugar at prices 20% below the average cost of sugar around the world. Sugar prices today are the same as when Jimmy Carter was in the Oval Office.
4. We provide 142,000 jobs in 22 states and provide $20 billion in annual economic activity.
5. All of these economic benefits to the nation are achieved at no cost to the American taxpayer.
6. Our biggest threat is subsidized and dumped foreign sugar. U.S. sugar policy is a response to that threat.

Much of the focus in the testimony was on the continued subsidization and dumping of Mexican sugar into the U.S. market. The one year that sugar policy cost taxpayers money, was when Mexico subsidized and dumped sugar into our market in violation of our trade laws. The biggest threat to a successful sugar policy is our trade problems with Mexico. Our producers are suffering great economic stress as a result of the suspension agreements with Mexico. The Hawaiian sugar industry closed its doors last December, as victims of the Mexican dumping. The Trump Administration is attempting to address this problem in the month of April with expectations to have it resolved no later than May 1. Your industry leaders are very engaged in this very difficult negotiation. If it cannot be resolved to our satisfaction, then duties should be put in place to stop all the sugar imports from Mexico. That is not our desire but we need a solution that works.

Hearings in the Senate began in Agriculture Committee Chairman Pat Robert’s state of Kansas. The next hearing that will include sugar will be held in Michigan in early May at the Saginaw Valley Research and Extension Center. Ranking Member Stabenow and the committee will provide the opportunity for commodity leaders to show the importance of their commodities to the state, the need for a strong safety net for farmers and the importance of research for American agriculture.

Sugar will likely testify in various regions around the country during the course of this year. We will tell our story at any and every appropriate venue. We may see more “listening sessions” outside of DC rather than formal committee hearings. These sessions can be held in more places at much lower costs than a formal hearing.

Florida Congressman Ted Yoho reintroduced his resolution called “Zero-for-Zero” in which U.S. sugar producers would give up our domestic policy if other countries would stop subsidizing and dumping their surplus sugar in the global market. The U.S. sugar industry wholeheartedly supports this resolution. When half of the sugar produced in the world is produced at a higher cost than in the U.S. and the less efficient foreign producers were forced to exit the business, we would see world sugar prices reflect the cost of production and rise substantially. Unilateral elimination or crippling of sugar policy would be foolish to push domestic producers out of business and become dependent on foreign suppliers for a strategic commodity in your food supply.

The long delay in getting a Secretary of Agriculture confirmed, along with several other political appointees in the subcabinet positions has caused harmful delays in moving the agriculture agenda forward in the new Administration. A strong Secretary has been needed to promote agriculture and defend its budgets and resources as the Administration sorts out the specifics of their priorities. Of particular note, we continue to wait on how we move forward with regulations on biotechnology disclosure under the new law passed last July.

Planting intentions for 2017 were released on March 31. Beet plantings will be down two percent or 28,600 acres from 2016. With market surpluses and greater confidence in higher yielding varieties, fewer acres are needed to produce adequate supplies for processing. There are no increases in any state in the country.