How well do you remember 1985? Twenty eight years ago, the average price for a gallon of gasoline was $1.20, a movie ticket was $2.75, a stamp cost 22 cents, and a car cost $9,000. Microsoft introduced Windows 1.0 that year, President Reagan first met Mikhail Gorbachev (Soviet Union), the first mobile phone call in England was made, Christa McAuliffe was chosen to be the first teacher to fly on the space shuttle Challenger, Olympic swimmer Michael Phelps was born, and the hit movie was “Back to the Future.”
In 1985, the average raw cane sugar price was 20.34 cents per pound (same as it is today); the Midwest wholesale price of refined beet sugar was 23 cents a pound (28-30 cents today); and the retail price was 35 cents a pound (68 cents today).
On Valentine’s Day this year, the Coalition for Sugar Reform and their congressional champions unveiled their “Sugar Reform Act” for the 2013 farm bill. The essence of the bill is to take beet and cane growers back to loan levels that were established in 1985. Buying inputs to run your business at prices that existed 28 years ago would certainly boost your short-term bottom line — but it would drive your suppliers out of business. Since 1985, we have closed half of our beet and cane factories and mills because sugar prices were stagnated around the loan rate and input cost kept increasing. Third-party investors abandoned the industry and sold the companies to growers — who in turn have embraced every possible efficiency they could find and afford just to stay in business.
The sugar reform bills — HR 693 in the House and S. 345 in the Senate — would make numerous changes to current sugar policy, with the sole intent to assure that the sugar market is oversupplied all of the time. It adds more risk to import decisions that would oversupply the market, requires producers to hold even larger surplus inventories, puts foreign suppliers ahead of American farmers, and effectively eliminates any surplus sugar to be used for ethanol production as a way to balance the market.
Except for the loan rate, the secretary of agriculture could change any provisions of the policy, taking into account the interests of consumers, workers in the food industry, user businesses and the relative competitiveness of domestically-produced and imported foods containing sugar (dumped by subsidized foreign producers).
This proposal neither respects nor appreciates the work, risk and investment made by our farmers to deliver a superior product to their door whenever they want it. It provides little certainty in order to plan and invest in the future
Our opponents will peddle their reform proposal on Capitol Hill and to the media as a “modest change” that doesn’t repeal price supports, or marketing allotments, or import quotas. It is the job of our industry leaders and congressional champions to tell the truth about the need of our current policy for the food security for our nation. Your grower leaders will be delivering that message far and wide on Capitol Hill in February and March before the planting season begins. Support them and show your appreciation to them in every way you can as they go about your telling your story to our nation’s policy makers.
The farm bill schedule for 2013 has not and will not be firmed up until we get past the numerous battles over spending cuts during the next several weeks or even longer. At this point, lawmakers have resigned themselves to the view that across-the-board spending cuts (sequestration) will occur. Everyone agrees that this is the worst way to cut spending; but given the polarized political entrenchment, we end up with a form of impromptu government leadership: “just make it up as you go along, from one crisis to another.” All of agriculture has to play a strong defense during this period to avoid the pillaging of its policies to pay for the cost of other government programs.
Luther Markwart, author of Dateline Washington, is executive vice president of the American Sugarbeet Growers Association.