SUA Calls for Collaborative Effort to Reform Sugar Policies

During a Senate Agriculture Committee hearing last week on the current domestic sugar program, the Sweetener Users Association (SUA) called for a collaborative industry effort to reform U.S. sugar policies. IDFA is a member of SUA and supports developing a more market-oriented sugar program in the 2007 Farm Bill.

"As sugar users, we want strong and healthy domestic sugar production and processing sectors," Joe Goehring, SUA representative and director of commodity operations for The Hershey Company, told committee members. "However, we see some real problems in the design of the current U.S. sugar policies that need to be addressed by the entire industry, including growers, processors, refiners and users."

Committee Chairman Saxby Chambliss (R-GA) endorsed the idea of reaching an industry consensus on a future sugar program, noting that reform of the peanut program in the 2002 Farm Bill was accomplished because farmers and manufacturers worked together to develop a common position.

Dr. J.B. Penn, U.S. Department of Agriculture's Under Secretary for Farm and Foreign Agricultural Services, who is responsible for the government program, also commented at the hearing. While noting that the current sugar program has worked to keep federal costs to a minimum, Penn agreed that it should be re-evaluated and cited several factors that could provide new impetus for reform, including a successful World Trade Organization Doha Development Agenda trade agreement; future free trade agreements allowing increased sugar imports; and the full implementation of the North American Free Trade Agreement in 2008, when duty-free sugar from Mexico will enter the United States without constraints.

Current flaws in the U.S. sugar program, according to IDFA, include government price supports that guarantee growers significantly higher prices than world prices, and prohibitive U.S. import tariffs. IDFA's efforts to bring about reform are intended to help manufacturers of ice cream, yogurt and other sweetened dairy foods.

Although the hearing focused on the current sugar program, the senators also wanted to discuss the use of sugar crops for ethanol. Chairman Chambliss said he expects the production of ethanol to become a key part of any future sugar policy. Senator Richard Lugar (R-IN) also pushed this theme, using the hearing to express his views about the importance of developing a strong ethanol program to face the challenges of rising worldwide demand for energy.

Posted May 15, 2006