The U.S. Department of Agriculture announced this week that it will increase the raw sugar tariff rate quota (TRQ), or amount of sugar imported without high tariffs, by 325,000 tons. While the news is encouraging, the amount falls short of the increase requested earlier this year by IDFA and the Sweetener Users Association. A larger increase, they said in a letter to USDA, is needed to provide adequate sugar supplies and reasonable prices for consumers and food and beverage manufacturers.
"There are serious adverse consequences from the current squeeze on sugar supplies," the letter said. "The high prices being paid by food and beverage manufacturers inevitably feed through into product prices, putting an additional burden on consumers, who are also paying higher prices for sugar in the grocery store."
The announced increase will bring the fiscal year 2011 stocks-to-use ratio to 13.5 percent, which is less than the 15.5 percent that historically results in adequate sugar supplies.
Senator Shaheen Criticizes Sugar Program
Senator Jeanne Shaheen (D-NH), who is sponsoring legislation (S.25) that would phase out the current sugar program, used the announcement as an opportunity to criticize the current U.S. sugar program.
"In a free-market economy, it should not be up to the government how much sugar is sold every year. Yet this is what our out-of-date U.S. sugar policy has evolved into - a government-managed, government-supported market that benefits sugar producers at the expense of consumers," Shaheen said. "No other commodity is as tightly controlled in the U.S. market."
IDFA members that make ice cream, flavored milk and other products using sugar, about 200 companies in total, have been greatly affected by low domestic supply levels and sugar prices that have recently been at or near record levels.
Last season, sugar-using industries were forced to import some 200,000 tons of "high-tier" sugar, which falls outside the TRQ and is subject to an extremely high tariff that is intended to be prohibitive. IDFA believes these imports are clear evidence of inadequate sugar supplies, because no purchasers would pay the high tariffs if an affordable alternative was available.
IDFA will continue to support steps to ensure an adequate and cost-effective sugar supply for members.
For more information, contact John Kelly, IDFA manager of international affairs, at email@example.com.