Legislation introduced to reform sugar program

by Ron Sterk
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Bipartisan legislation to reform the controversial U.S. sugar program was introduced on Nov. 7.
 

WASHINGTON — Bipartisan legislation to reform the controversial U.S. sugar program was introduced on Nov. 7, prompting quick responses from sugar users and producers.

Termed the Sugar Modernization Act of 2017, H.R.4265 was introduced by representatives Virginia Foxx of North Carolina and Danny Davis of Illinois, and S.2086 was introduced by senators Jeanne Shaheen of New Hampshire and Pat Toomey of Pennsylvania, along with about 50 cosponsors between the two houses.

As of Nov. 8 text for the bills had not yet been received, according to the Congress.gov web site. Summary of both bills basically said the legislation was to extend and modernize the U.S. sugar program by amending the Federal Agriculture Improvement and Reform Act of 1996, extend and subsequently repeal of the feedstock flexibility program for bioenergy producers under the Farm Security and Rural Investment Act of 2002, and extend and subsequently replace flexible marketing allotments for sugar under the Agriculture Adjustment Act of 1938, and for other purposes.

John Downs
John Downs, president and c.e.o. of the National Confectioners Association and co-chair of the Coalition for Sugar Reform

“We thank the sponsors of this legislation for their efforts to level the playing field for consumers and businesses by reforming this Depression-era policy,” said John Downs, president and chief executive officer of the National Confectioners Association and co-chair of the Coalition for Sugar Reform, a broad-based group of food manufacturers, environmental and government advocates and other organizations. “We look forward to working with the members of Congress and other key stakeholders to support these critical reforms.”

The Coalition contends the existing sugar program “harms companies that use sugar as an ingredient in their products while protecting a small group of politically well-connected sugar producers,” noting that sugar was the only commodity program not reformed in the 2014 farm bill. The group maintains that three U.S. manufacturing jobs are lost for every sugar-producing job saved by the program.

“If we’re serious about creating long-term economic success, then we need to foster a better environment for small-business growth; we need to reform the sugar program now,” Mr. Downs said. “There is great potential for expanded factories, more jobs and new U.S.-based facilities if the government permitted food and beverage companies to have access to fair prices on sugar.”

The Sweetener Users Association (S.U.A.) said the legislation “leaves in place smart protections to ensure the sugar market operates freely without unnecessary government intrusion,” and that such reform was long overdue.

Rick Pasco
Rick Pasco, president of the Sweetener Users Association

“The Sugar Policy Modernization Act does it all,” said Rick Pasco, president of the S.U.A. “It will 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. We encourage the House and Senate to advance the (legislation) quickly for the benefit of Americans across the country.”

Sugar users maintain, in part, that the sugar program restricts imports of lower-priced sugar from the world market, thus making available supply more expensive. Sugar producers maintain, in part, that world prices are low only because of subsidies in other countries, and that increased imports would severely damage the U.S. sugar industry, especially farmers.

The American Sugar Alliance (A.S.A.), which represents U.S. sugar beet and cane growers, processors, refiners, suppliers, sugar workers and others, called the latest legislation the “Sugar Farmer Bankruptcy Bill,” noting that attempts to reform the sugar program have previously been rejected three times on the Senate floor and twice on the House floor as well as twice at the committee level during the 2014 farm bill debate.

Galen Lee
Galen Lee, president of the American Sugarbeet Growers Association

“Big candy companies have lobbied for decades to outsource production to foreign countries with high subsidies and low labor and environmental standards,” said Galen Lee, president of the American Sugarbeet Growers Association. “We’re hopeful that this bill will end up just like all the others designed to enrich candy companies at the expense of America’s family farmers. We provide this country with an affordable domestic supply of an essential ingredient, and we help generate 142,000 jobs at no cost to taxpayers. Most lawmakers don’t want to upend that success story.”

The A.S.A. noted that sugar producers would lose access to nonrecourse loans under the proposed legislation, and it would force the U.S. Department of Agriculture to maintain an oversupplied sugar market that would keep prices depressed with imports.

The baking industry, which is the largest sugar-using segment of food manufacturing, supported the legislation, as it has in the past.

Robb MacKie, ABA
Robb MacKie, president of the American Bakers Association

Robb MacKie, president of the American Bakers Association (A.B.A.), praised the sponsors of the legislation “who continue to fight to ensure tax-paying American consumers stop flipping the bill for artificially inflated U.S. sugar prices.”

Mike Goscinski, A.B.A. director of government relations, said, “Today’s introduction is the important first step toward reforming this depression-era U.S. commodity program, which has cost consumers more than $15 billion since 2008, and is responsible for a loss of over 125,000 jobs in sugar-using industries.”

The Independent Bakers Association (I.B.A.) also applauded the sponsors of the legislation “to finally address the federal government’s practice of protecting the wealthy Big Sugar industry.”

“The federal sugar program, first introduced in the New Deal, is outdated, costly and in desperate need of reform,” said Nick Pyle, president of the I.B.A. “I.B.A. looks forward to supporting Congress as it works to modernize the program and reduce its burdens on American taxpayers, consumers and manufacturers in the food industry.”

The U.S.D.A. is charged with running the sugar program at no cost to taxpayers by maintaining supplies at reasonable prices at levels that prevent forfeitures against government loans to producers, but can raise import levels during times of tight sugar supplies. The sugar program, in part, allows U.S. producers to provide up to 85% of U.S. sugar needs with the remainder made up by imports, mostly from Mexico. 
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READER COMMENTS (1)

By L J Hunt III 11/9/2017 6:24:06 PM
If you believe that sugar users are going to pass on any savings as a result of this legislation I have a number of bridges to sell them.