THE OPPOSITION: What sugar reform activists believe should happen to the U.S Sugar Policy in the upcoming Farm Bill
By Treasure Coast Newspapers Editorial Board
You spy that bag of M&Ms in the checkout line and you're tempted. But $1.79 seems kind of steep.
In fact, it is. Most food containing American-grown sugar costs significantly more than it would if sugar prices were lower.
But sugar prices are inflated by design, a result of a federal program originally passed in 1934 to protect sugar growers from foreign competition.
For the domestic sugar industry, it's been a sweet deal indeed.
But a growing bipartisan coalition has soured on sugar policy, and might be on the cusp of forcing significant changes.
An unlikely alliance of Democrats and Republicans, free-market advocates and environmentalists, small businesses, retailers and food manufacturers are backing the Sugar Policy Modernization Act, which promises to roll back artificially high U.S. sugar prices by reforming price supports.
U.S. sugar policy is protectionist, anchored in government intervention in the free market. The government sets minimum sugar prices and provides loans to sugar farmers, permitting them to repay those loans with raw sugar if prices fall below the legal floor.
Foreign imports are limited, and "sugar marketing allotments" limit the amount of domestically produced sugar that processors can sell each year, eliminating the prospect of overproduction.
Unsurprisingly, this drives up the price of sugar; American manufacturers can pay twice as much for sugar as the rest of the world.
That shows up in your grocery bill.
To be sure, current sugar policy has been beneficial for some communities in South Florida. The industry claims to support an estimated 30,000 direct and indirect jobs here, and thousands more in other sugar-growing regions of the country.
Naturally, the industry is hostile to the proposed Modernization Act, labeling it the "Sugar Farmer Bankruptcy Bill." And should the measure be included in the next five-year Farm Bill, sugar interests claim it could lead to massive oversupply, creating a collapse in prices and, ultimately, a loss of sugar production and jobs.
In turn, they say, that could cause major disruption in the food-supply chain for food manufacturers and consumers.
These are legitimate concerns that must be taken seriously.
Yet there is convincing evidence that whatever the limited, regional impact the Sugar Policy Modernization Act might have here, it could be a boon for U.S. consumers on the whole.
One 2011 report concluded that if U.S. sugar prices fell by one-third, U.S. consumers could save as much as $3.5 billion.
Proponents also say it could boost overall employment, citing federal studies that suggest every sugar-processing job subsidized via artificially high U.S. sugar prices costs three American manufacturing jobs.
Moreover, the Sugar Policy Modernization Act could yield significant environmental benefits.
In a letter to U.S. Sen. Bill Nelson, 11 environmental organizations asked the Florida Democrat to support the proposal and asserted the mass production of sugar cane in the Everglades Agricultural Area "remains a great impediment" to efforts to restore the Everglades.
Via current sugar policy, "American consumers and taxpayers have lined the pockets of sugar companies," the letter states — and that has led to the inordinate political clout the industry wields here in Florida and nationwide.
The sugar industry counters these claims.
"Sugarcane farmers have been the largest private partner in Everglades restoration efforts for more than 20 years, cleaning every drop of water leaving their farms, and paying nearly $450 million in taxes to further clean water and fund research into continued restoration efforts and have given up 123,000 acres of productive farm land for restoration projects," said Judy Sanchez, spokesperson for U.S. Sugar, in response to a recent inquiry.
A message to Florida Crystals seeking comment was not returned.
Other defenders of the current sugar program cite the heavy subsidization of the sugar industry in countries like Mexico. If there's truly to be a level playing field, they say, foreign competitors must play by the same rules.
That sentiment may resonate in Washington, where President Donald Trump has enacted new tariffs, moves he claims are necessary to protect and rebuild vital domestic industries harmed by unfair foreign competition.
Yet the sugar industry has enjoyed such protection for more than 80 years. This has been good for the industry, but the drawbacks for the rest of the country are clear — and it's time, finally, for a change.
Editorials of Treasure Coast Newspapers/TCPalm are decided collectively by its Editorial Board. To respond to this editorial in a letter to the editor, email up to 300 words to TCNLetters@TCPalm.com.
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April 12, 2018 at 10:24AM
WASHINGTON, D.C. — A Red River Valley sugarbeet advocate say he's confident domestic sugar producers can convince Congress to reject yet another attempt to dismantle the U.S. sugar program.
The Sugar Policy Modernization Act proposal is different than previous attacks in that it is a "comprehensive dismantling of sugar policy," said Kevin Price, director of governmental affairs for American Crystal Sugar Co., who lobbies on behalf of the Moorhead, Minn., based beet cooperative.
Price likened the difference to that of a shotgun blast, rather than the rifle shots of the past that have addressed pieces of the policy. "They're trying to tear it down from A to Z," Price said. "We've seen all of these ideas before. None of them have been accepted by Congress, and we anticipate Congress will reject this as well."
U.S. sugar policy supports domestic production by limiting imports of sugar that domestic producers say are often subsidized by foreign governments.
The Sweetener Users Association applauded the act and its sponsors Reps. Virginia Foxx, R-N.C., and Danny Davis, D-Ill.; and Sens. Jeanne Shaheen, D-N.H., and Pat Toomey, R-Pa. "The legislation has already been endorsed by dozens of cosponsors in the House and Senate," the SUA said.
Does it all
The sugar users — all customers of American Crystal and its marketing arm — said the act "does it all" and would "help American businesses of all sizes, consumers, workers and families — without costing taxpayers."
"It is very rare that Congress has the chance to consider legislation that will do so much for so many," said Rick Pasco, president of the SUA. The act "reforms unnecessary sugar regulations" and ensures that companies can "access sugar when they need it." By assuring "access to reasonable supplies" the bill "will encourage companies to continue manufacturing food and beverages in the United States, not offshore."
The SUA cited a Commerce Department study that said three U.S. manufacturing jobs are lost for "every sugar-related job" preserved by current sugar "subsidies."
"The bill leaves in place smart protections to ensure the sugar market operates freely without unnecessary government intrusion — and without costs to taxpayers," the SUA said.
The SUA described sugar as "the most tightly controlled commodity in the United States" and the "only commodity not reformed by Congress in the 2014 farm bill." They contend that the current policy forces American consumers to pay "up to $3 billion a year to subsidize very profitable U.S. sugar processors."
Price thinks the logic that will defeat the bill is the knowledge that the current policy supplies reasonably priced sugar of trustworthy supply, supports jobs and at zero cost to the taxpayer.
"If it ain't broke, don't fix it," Price said.
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November 14, 2017 at 04:30PM