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Dairy Facts 2016
 
 

The Hagstrom Report: Sugar Modernization Bill Introduced, But Growers Object

Nov 08, 2017

This is an excerpt reprinted with permission from the Nov. 8 edition of The Hagstrom Report, a news service providing original national and international agricultural news to its subscribers.


Reps. Virginia Foxx, R-N.C., and Danny Davis, D-Ill., and Sens. Jeanne Shaheen, D-N.H., and Pat Toomey R-Pa., on Tuesday introduced the bipartisan and bicameral Sugar Policy Modernization Act, legislation that they said would phase market reforms into the U.S. sugar program.

Foxx said in a news release that the bill would:

  • Lift restrictions on the domestic production and sale of refined sugar.
  • Reduce taxpayer liability to loan forfeitures when sugar processors decide not to pay back their USDA loans.
  • Ensure that the domestic demand for sugar is considered when the USDA administers the sugar program.
  • Bring market forces into the U.S. sugar market and phase out supply-management policies.

“Our nation’s antiquated sugar program seeks to prop up prices for the sugar industry at every turn, sticking consumers with the bill. The way our current system is set up, taxpayers and manufacturers bear all of the risks in the form of bailouts, uncertainty and shortages, while the sugar industry reaps guaranteed rewards,” said Foxx.

“This job-killing subsidy program is like a vampire, refusing to die while continuing to enrich a handful of well-connected plantation owners at the expense of hundreds of thousands of confectionery jobs in the United States,” Davis said.

“In 1987, Brach’s, located in the 7th Congressional District, was Chicago’s sixth-largest manufacturer, with 4,000 workers, the average worker spent 27 years in a Brach’s plant. Largely due to the sugar subsidy, those jobs, those careers, are gone now and the old Brach’s factory in the industrial park on Chicago’s Westside which once employed over 1,000 workers is a wasteland. The continuation of the sugar program today puts 7,000 Illinois manufacturing jobs at risk while the cost to taxpayers has skyrocketed and will continue to grow," Davis said.

“This bipartisan bill will help make reasonable, commonsense changes to the federal sugar support program to cut wasteful spending and help grow American businesses,” Shaheen said. “It’s time for Congress to put special interests aside and work to reduce costs and protect American workers in New Hampshire and across the country.”

“It is time to reform this government corporate welfare program that hikes food costs for families and threatens thousands of well-paying jobs in Pennsylvania,” said Toomey.

The National Confectioners Association, which represents candy and chocolate companies, said, “We applaud the sponsors of this bicameral, bipartisan legislation for their efforts to level the playing field for consumers and businesses by reforming this Depression-era policy that hurts so many while benefitting just a few.

“The benefits of sugar subsidies and protections go directly to just 14 sugar beet and sugar cane producers in a few states,” NCA added. “This is at the expense of American taxpayers and to the detriment of hundreds of thousands of people who are employed by companies that use sugar as an ingredient in their products.”

But Reps. Mike Simpson, R-Idaho, and Alcee Hastings, D-Fla., co-chairs of the House Sugar Caucus, sent their colleagues a letter urging them to oppose the Foxx bill.

“We believe that this legislation seeks to single out the U.S. sugar program, leaving U.S. sugar farmers without the tools needed to survive the worst farm economy in decades,” Simpson and Hastings wrote.

“Outsourcing U.S. sugar production would have devastating effects on sugar producers and consumers. It would deny sugar producers access to nonrecourse loans, and as a result, producers would have difficulty obtaining capital and staying in business. It would send prices back to 1980 levels, resulting in an unfeasible financial squeeze on family farms, and require the U.S. Department of Agriculture (USDA) to flood our markets with imports to lower sugar prices for large food manufacturers, which pass their costs onto consumers.”

The American Sugar Alliance also released comments from a sugar beet grower and a cane grower.

“A better name would be the ‘Sugar Farmer Bankruptcy Bill,’ because that’s exactly what the Foxx-Davis plan is designed to do,” said Galen Lee, an Idaho sugarbeet farmer who is 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. 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," Lee said.

"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," Lee added.

“The Foxx-Davis scheme would be crippling to sugar farmers, and would keep future generations off the farm. This is serious business to us,” said Travis Medine, a fifth-generation Louisiana sugarcane farmer. “Our livelihoods hang in the balance, and we literally have thousands of family farms and manufacturing jobs on the line. Without sugar, communities all across southern Louisiana would suffer.”

Simpson/Hastings letter

AEI Publishes New Sugar Program Analysis

The American Enterprise Institute on Monday published its latest analysis of the U.S. sugar program.

AEI said the program “is a protectionist scheme destined to transfer income to sugar growers and processors,” at the cost of $2.4 billion to $4 billion to sugar users and consumers each year.

AEI recommends “the total removal of the sugar program’s main components, including tariff-rate quotas, allotments, and sugar loan rates.”

American Enterprise Institute — Analysis of the US Sugar Program


The Hagstrom Report covers Congressional hearings, markups and press conferences in Washington D.C., as well as national nutrition news and farm meetings throughout the United States. Subscribers to The Hagstrom Report receive a digital newsletter daily while Congress is in session and at other times as events require and news happens.
 
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