Sugar growers, users argue sugar program | TheFencePost.com

Sugar growers, users argue sugar program

ORLANDO — Sugar grower and user lobbyists engaged in a Valentine's Day sparring match Feb. 14 over the direction of the sugar program in the next farm bill during one of the last sessions at the annual International Sweetener Colloquium.

Meanwhile, the Sweetener Users Association, which represents candy companies and other industrial users and sponsors the colloquium, and the American Sugar Alliance, which represents the beet and cane growers, issued competing news releases touting their views of the meaning of the holiday for their members.

In a debate that has become an annual event, Jack Roney, the chief economist for the growers, defended the current sugar program, which sets floor prices and places restrictions on imports and allows growers to take out loans from the government on their production and forfeit the sugar to the government in the case of a disastrous price drop.

Roney said the program is needed in order to provide stability to an industry that provides by law 85 percent of the sugar sold in the United States.

"The producers want the industry to survive to serve customers and do it on a geographically dispersed basis," Roney said, noting that weather problems in either the cane-growing south or the beet-growing areas in the northern states can cause supply problems.

Roney also pointed out that, as consumers increasingly demand to know whether food ingredients are sustainable, "there is a price to sustainability and American standards are highest for workers, wage and safety, water quality and conservation, air quality and soil quality and retention."

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Bill O'Conner, a former House Agriculture Committee staff director who is with the Watkinson & Miller law firm and a consultant to the users, acknowledged that the current program and agreements with Mexico have provided stability to supplies but he said "the cost of that stability is astonishing."

Higher sugar prices in the United States than in other countries have led to the shift of 100,000 jobs in the sugar-containing products industry to other countries while Roney maintained that the shift has been due to labor and environmental concerns.

O'Conner said the users are pleased that Reps. Virginia Foxx, R-N.C., and Danny Davis, D-Ill., have agreed to introduce the Sugar Modernization Act.

That bill, which the users hope will be offered as an amendment to the farm bill, would continue the loan program, but make the industry pay the cost of any forfeitures. It would also eliminate the feedstock flexibility program, which allows the Agriculture secretary to sell excess sugar for use in ethanol production.

As part of the current program, the Agriculture Department maintains a 13.5 to 15 percent stocks to use ratio, and the users would like that raised so that shortages are less likely to occur, O'Conner said.

The Sugar Modernization Act would raise the stocks-to-use ratio to 14.5 to 15.5 percent and make changes to tariff rate quotas to achieve that.

Roney said that ending government sponsorship of the nonrecourse loan program would mean that the sugar growers would not have a safety net and that more growers would be forced out of business.

O'Conner said the users want the U.S. growers to stay in business but "We are not quite sure that sugar producers have a God given right to stay in business."

Paul Farmer of CSC Sugar, an independent Florida refining firm, said that the growers and the users should share more information on their costs in order to determine what is a fair price for domestically produced sugar.

The Sweetener Users Association sent reporters a link to a blog post in The Hill in which Foxx and Davis wrote, "This Valentine's Day, when you buy your sweetheart that classic box of American chocolates or any other kind of sweet, you will also be paying a hidden tax that's baked into every food, snack and treat."

They added, "This tax is courtesy of the U.S. sugar program, and it forces American consumers and small businesses to pay $2.4–$4 billion to subsidize a handful of wealthy sugar processors every year according to the American Enterprise Institute."

But the American Sugar Alliance said in their release, "The farmers' share of Valentine's Day sales is heartbreaking. Chocolate kisses, which sold for $1.99, contained only 1 penny's worth of sugar, while sugar accounted for 4 cents of a $9.99 assorted truffle offering."

"Sugar's share of sweetened products is very low," said Ardis Hammock, a sugarcane farmer from Moore Haven, Fla. Accounting for inflation, Hammock said, "Sugar prices are actually lower today than in 1980."