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(Gerard Scimeca | TownHall.com) – Economic upheaval currently dominates the concerns of most Americans, who more and more are now staring at empty shelves and having cold sweats over the thought of filling up their gas tanks. Inflation is at a 40-year high and climbing with no end in sight as the White House responds by setting a new high in the ‘Index of Economic Blame.’

If one silver lining has arisen from this disaster it is the growing consensus for securing America’s supply chain through domestic workers, resources, and production. An effort is already underway in Congress to help the U.S. regain its formerly undisputed leadership in semiconductors, recognizing that dependence on foreign manufacturers threatens America’s economic and national security. Lawmakers are also calling for greater domestic energy production, as the price of oil has shot up over 70 percent in 12 months and looks to go even higher with the destabilizing impact of the Russian invasion of Ukraine.

These are important steps, and underscore the lesson that price stability and a secure supply chain are the critical components of long-term economic strength. This is a call to avoid over-reliance on foreign producers when there are vibrant, competitive, and available industries here at home

Astoundingly there are still some calling for America to surrender a key component of our food supply to foreign suppliers. The debate over U.S. sugar policy is not a new one, but has become a flashpoint in trade policy for those who would forsake American industry and thousands of its workers for a temporary price advantage, in essence trading a short-term gain for long-term pain.

Currently some U.S. food manufacturers argue they are paying too much for sugar due to U.S. policy that limits the amount of imported foreign sugar. Were it true that foreign competitors could fairly deliver raw and refined sugar at a lower price on the open market better than the thousands of U.S. growers then there would be no issue to debate. But the food makers’ myths surrounding America’s sugar policy are dangerously simplistic and self-serving, and have absolutely no resemblance to fair and open trade.

Sugar is, by far, the most corrupt and distorted global food commodity, with the major sugar-producing nations such as India, China, Brazil and others subsidizing their domestic production to the tune of billions of dollars a year, often selling it below cost. Meanwhile they erect high tariffs and sugar import quotas as trade barriers to their own domestic economy. Why would America reward the predatory and illegal trade practices of other nations who aim to torpedo our domestic agriculture?

If America were to eliminate our sensible and necessary import quotas we would soon be drowning in a flood of cheap, subsidized foreign sugar that would wipe U.S. sugar growers off the map. Then, with the competition eliminated, foreign importers would naturally increase the price, and consumers would find themselves captive to wild fluctuations in cost and supply from this very unstable, corrupt, and inefficient global market. Sound familiar?

Europe tried this 15 years ago, with the EU unilaterally disarming its trade barriers to foreign nations’ dumping practices, only to see their domestic sugar industry decimated and then prices raised by the sugar barbarians who had been invited to raid their shores. Finding themselves with wildly fluctuating prices and unstable supply, Europe has since scrambled to rebuild their domestic sugar industry through subsidies and quotas.

Even the feckless World Trade Organization is ruling on illegal sugar subsidies and announcing violations of international trade agreements. Despite the protests of the world’s biggest sugar growers, India, China, Brazil, and Indonesia, trade violations are not an exception but their entire business model.

Meanwhile the U.S. policy does not subsidize domestic sugar at all, but merely sets import quotas to prevent illegal dumping while offering interest-bearing loans to sugar producers. The result is an affordable and stable supply of sugar. Indexed to inflation, sugar is actually cheaper today than it was in the 1980s, so it is still an incredibly good deal for consumers and food processors.

Manufacturers claim they are trying to help the U.S. consumer by lowering their costs, but as one exhaustive study showed, cheaper sugar would only increase their profit margins, with little to no savings passed on to consumers. Until other nations agree to eliminate their subsidies and trade barriers, the current U.S. policy on sugar must stay in place. It is good for our economy, good for farmers, good for consumers, and plants a flag in the policy debate that says America is pushing back against economic surrender.

(Chuck Muth) – On March 9, 2022, the Associated Press reported…

“Ukraine’s government has banned the export of wheat, oats and other staples that are crucial for global food supplies as authorities try to ensure they can feed people during Russia’s intensifying war.

“The export ban is needed to prevent a ‘humanitarian crisis in Ukraine,’ stabilize the market and ‘meet the needs of the population in critical food products,’ Roman Leshchenko, Ukraine’s minister of agrarian and food policy, said in a statement.”

Among the “other staples” and “critical food products” included in the export ban: Sugar.

And yet, some in Congress continue to beat the drums for eliminating our current U.S. sugar policy which would result in Americans becoming dependent on sugar imports from other nations.

This is not only a dumb idea economically – especially since the leading global sugar exporters unfairly subsidize their production of the commodity – but has national defense implications as well.

“Americans know that food policy is a matter of national security,” reminded South Dakota Gov. Kristi Noem last week.  “When another country feeds us, they control us.”

Exactly.

Just look at prices at the gas pump now that we’re no longer energy independent and relying on OPEC and Russian oil.

Current U.S. sugar policy protects American consumers by keeping sugar available and affordable. Remove U.S. sugar policy and American sugar farmers will be driven out of business by subsidized foreign sugar producers.

Making the U.S. solely dependent on foreign nations for a food staple means that Americans could see skyrocketing costs for all manner of foods – not just cakes and candies.

And remember this reality-check from the American Sugar Alliance…

“America’s no-cost sugar policy is built on loans repaid with interest – not subsidy checks – which ensures a secure supply of American-made sugar at no cost to taxpayers.”

U.S sugar policy works.  Stop trying to fix it.  Our national security depends on it.

(Chuck Muth) – In what I take to be a clear indication the COVID crisis is easing, critics of U.S. sugar policy are back at it in 2022, complete with what Big Tech would call “misinformation.”

Writing for the Daily Iowan, Shahab Khan perpetuates the claim that “it is in the best interest of the federal government to scrap the U.S. sugar program.”

To reach that conclusion, Mr. Khan trots out the old saw that “American consumers pay more than double for the commodity compared to the rest of the world” while arguing that “the federal government’s policies need to focus on…providing consumers with inexpensive goods.”

Naturally, Mr. Khan chooses to ignore the international market reality that has resulted in the U.S. policy of modest tariffs and import restrictions on sugar from certain global competitors:

Foreign government subsidies.

U.S. sugar producers receive NO taxpayer subsidies for their product.

Mr. Khan argues that a given foreign country has a “comparative advantage” when the cost of producing a product “is less than another country’s cost of producing that good.”

But in this case, the advantage isn’t due to a lower cost of production, but in government subsidies that artificially deflate the true market cost of production.  Indeed, India was recently sanctioned for this by the WTO (World Trade Organization).

Mr. Khan also conveniently ignores that fact that domestic U.S. sugar costs today about what it did thirty years ago.  So increases in the cost of sugar-infused sweets-and-treats has little to do with U.S. sugar policy, especially in the current economic environment of rising inflation on just about ALL products.

If folks such as Mr. Khan want to zero out the U.S. sugar program and current policies, the first step is for international “cheaters” to zero out their government subsidies.  It’s only a “free market” if competitors are competing freely AND fairly without artificial support.

Zero for zero.  It’s the only American policy that makes sense.

(Chuck Muth) – It all started in early 2019.  Australia, Brazil and Guatemala complained that India’s sugar subsidies were distorting the world market and giving the country an unfair trade advantage.  According to a report this month by Harikishan Sharma of the Indian Express…

“All three countries complained that India provides domestic support to sugarcane producers that exceeds the de minimis level of 10% of the total value of sugarcane production…  They also raised the issue of India’s alleged export subsidies…”

Talks ensued between the nations but “failed to resolve the dispute.”  So off to the WTO (World Trade Organization).

A formal WTO complaint was filed in July 2019.  An initial organizational meeting was held in November.  However, due to COVID the next hearing over the dispute wasn’t held until more than a year later.

The “Dispute Settlement Body” (DSB) held additional meetings in 2021 and accepted written testimony.  On September 30, 2021, the panel issued its final report: India was guilty of violating WTO rules with its various sugar subsidies.

The panel found, Sharma reported, “that for five consecutive sugar seasons from 2014-15 to 2018-19, India provided non-exempt product-specific domestic support to sugarcane producers in excess of the permitted level of 10% of the total value of sugarcane production.”

In its report, the panel recommended that “India bring its WTO-inconsistent measures into conformity with its obligations…within 120 days from the adoption of our Report.”

However, India continues to deny the allegations and rejected the panel’s conclusions as “completely unacceptable,” “erroneous,” “unreasoned,” and “not supported by the WTO rules.”

India’s Commerce Industry also released a statement declaring that there will be “no impact of the WTO panel’s findings on sugar on any of India’s existing and ongoing policy measures in the sugar sector” and announced it was appealing the decision.

Unfortunately, as reported by the Business Standard, the “lack of a functional appellate body at the WTO means a final decision on the matter is unlikely anytime soon.”

Which means U.S. sugar policy restrictions on the import of artificially cheap, subsidized sugar from India will need to remain in place for the foreseeable future.  Unless India voluntarily agrees to knock it off.  Don’t hold your breath waiting.

Citizen Outreach is a free-market grassroots advocacy organization.  For more information, please visit www.CitizenOutreach.org

(Chuck Muth) – Opponents of the U.S. sugar program of modest tariffs and targeted import restrictions regularly proclaim support for “free market” policies.

But it’s not a free market if competitors are using government subsidies to distort the market and give one side an unfair advantage – as India has now been found doing.

From a Bloomberg report by Bryce Baschuk on Tuesday…

“A World Trade Organization panel ruled that India violated international trade rules when it offered excessive subsidies for the production and export of sugar and sugarcane.

“India’s policies were inconsistent with WTO rules that govern the levels at which nations can subsidize domestic agricultural production, according to a decision posted Tuesday on the WTO’s website. …

“India can appeal the ruling at any point in the next 60 days, a move that would act like a veto because the WTO’s appellate body is not functioning.

“The panel said India violated the WTO agriculture agreement when it provided excessive non-exempt product-specific subsidies to sugarcane producers between 2014 and 2019. The WTO said India must remove its illegal subsidies within 120 days of the adoption of the report.

“The dispute dates back to 2019 when Brazil, Australia and Guatemala filed parallel WTO complaints that alleged the Indian government massively increased its sugar subsidies and reintroduced a minimum price for sugar, which led to increased production of sugar that outstripped domestic demand.

“The nations also contested the legality of India’s decision to assign minimum export quotas for domestic sugar mills and other export incentives that they said distorted world market prices.”

Current U.S. sugar policies are the correct ones.  On a level playing field, American sugar producers can compete with anyone of the planet.

The only reform that makes sense – and it’s common sense – is for the U.S. to zero out its trade restrictions only in simultaneous return for governments such as India zeroing out their market-distorting government subsidies.

Zero-for-Zero.  Catch it!

Citizen Outreach is a free-market grassroots advocacy organization.  For more information, please visit www.CitizenOutreach.org

(Global Alliance for Sugar Trade Reform) – Meeting in London this week, Global Sugar Alliance members urged all countries to defend the multilateral trade system, reaffirmed their full support of the case Australia, Brazil and Guatemala have taken in the World Trade Organization (WTO) against India’s sugar subsidies and called on India to comply with its international obligations.

Agricultural trade reform is long overdue. Building on commitments already made, the 12th WTO Ministerial Conference must make substantial and ambitious progress on agricultural reform – increase market access, reduce trade-distorting domestic support and eliminate export subsidies. It must also strengthen the WTO and restore the functionality of the WTO’s dispute settlement system by restoring the functionality of the WTO’s Appellate Body.

The WTO Panel’s ruling in the case brought by Australia, Brazil and Guatemala against India’s sugar subsidies is widely anticipated.

Global Sugar Alliance Chairman and Queensland Sugar Limited (QSL) Managing Director, Greg Beashel said Global Sugar Alliance members are fair traders who abide by their WTO obligations. “The case against India is strong and we look forward to its swift resolution. The sugar market does not need India’s sugar export subsidies,” he said.

“We expect the Panel will rule – that the Indian sugar regime is fundamentally flawed, it breaches the commitments India made in the WTO and it needs to be reformed,” Mr Beashel said.

India’s decisions not to provide export subsidies for the 2021/22 season and to accelerate the roll out of its ethanol blending roadmap are welcome initial steps. The Global Sugar Alliance calls on India to go further and permanently end its sugar subsidies and reduce its excessive domestic price supports in compliance with its WTO obligations.

“We would welcome India’s subsidy-free participation in the world market.”

Leopoldo Bolaños, International Trader, Association of Sugar Producers of Guatemala (ASAZGUA), encouraged India to comply with its WTO commitments. “The world sugar market does not need another round of price-depressing Indian sugar subsidies, which impose an enormous cost on the world’s most efficient sugar producers.”

Citizen Outreach is a free-market grassroots advocacy organization.  For more information, please visit www.CitizenOutreach.org

(Chuck Muth) – Halloween 2022 has now come and gone with a twist this year: Few scary, holiday-themed op-eds and press releases from Big Candy railing against the U.S. sugar program.

Halloween is usually a “don’t miss” opportunity for candy lobbyists in DC to push Congress for an end to targeted quotas and limited tariffs on imported sugar from foreign competitors that subsidize their home-grown sugar industries.

Not this year.

Gone were the horrific, scare-tactic warnings about the cost of sugar hurting consumers, bakers and manufacturers.

Instead, as reported by Jerry Hagstrom of the Hagstrom Report, “Halloween chocolate and candy sales hit $324 million, which is an 48% increase from 2020 and an 59.8% increase from 2019.”

“Chocolate and candy sales have come roaring back during the 2021 Halloween season as excitement continues to grow and consumers tell us they’re ready to celebrate,” National Confectioner’s Association President John Downs said in a news release.

Mr. Hagstrom also noted a Reuters report that “the strong sales led Hershey to raise its annual forecasts for sales and profit.”

With Thanksgiving up next on the holiday circuit, candy-makers should thank their lucky stars for the U.S. sugar policy, which not only assured ample supply of the sweetener for their products, but a reliable in-house supply chain that kept shelves full of treats for annual trick-or-treaters.

And let’s hope their new-found appreciation for America’s no-cost-to-taxpayers sugar program extends into this year’s upcoming candy-cane and ginger-bread man season.

Citizen Outreach is a free-market grassroots advocacy organization.  For more information, please visit www.CitizenOutreach.org

(Chuck Muth) – Americans aren’t used to doing without.  They’re accustomed to living in the land of plenty.  If you want it, it’s there.  When you want it.  From multiple sources.  At competitively affordable prices.

Not anymore.

Thanks to President Biden’s “supply chain” crisis, grocery and retail store shelves are empty of products usually found in abundance.

There’s a dearth of refrigerators, freezers, dishwashers, dryers, dehumidifiers and microwaves.  And, as White House Press Secretary Jen Psaki sarcastically noted recently, there’s “the tragedy of the treadmill that’s delayed.”

The cost of lumber and drywall has skyrocketed, driving up the cost of new homes, as well as home repairs.

Computer chips have people waiting in blocks-long lines to get gaming consoles and graphic cards.  Printers and ink are in short supply, too.  And when you can find them on the “black market,” they’re costing a king’s ransom.

It’s also resulted in a shortage of new cars, which has in turn helped dry up the used car market.  So the relatively few cars available now cost an arm and a leg.  As do the parts – if you can find them – for repairs.

There’s also a shortage of coffee beans, wheat, barley, peas, and even chicken wings!

But not sugar.

Thanks to the U.S. sugar policy that restricts imports from foreign countries that unfairly subsidize their sugar industries, Americans not only have a dependable supply of this critical commodity, but a reliable supply chain as well.

During the height of the COVID panic – when there was a run on goods and shelves started emptying – sugar remained in ample supply.  Why?  Because U.S. sugar producers produce sugar in the U.S. and essentially fund and support their own supply chain.

Indeed, American sugar companies produce the sugar, refine the sugar, package the sugar and store the sugar in facilities near customers, then deliver the sugar to customers when it’s needed.

If you take U.S. producers out of the equation – and food companies had to import refined sugar, store it themselves and handle all the logistics – sweets, treats and manner of other sugar-infused foods would be as hard to find as toilet paper was at the start of the pandemic.

And you’d practically have to take out a second mortgage to buy a Hershey bar!

The U.S. sugar industry is in an envious position during this supply chain crisis.  And American consumers are the biggest beneficiaries.  The no-cost-to-taxpayers sugar program works.  And when something works, don’t “fix” it.

(Chuck Muth) – Asit Ranjan Mishra of LiveMint.com reported last week that India is likely to lose in a WTO (World Trade Organization) complaint over sugar export subsidies that was filed against it by Brazil, Australia and Guatemala.

The dispute alleges that India’s export subsidies for producers of sugar and sugar cane “have suppressed global prices by up to 25%” and have caused “losses of around $1.3 billion per year.”

“India’s domestic support for sugarcane and its export subsidies for sugar are of particular concern to Australia,” the government said in a statement, “which is why Australia has joined Brazil and Guatemala in initiating a dispute to challenge those measures.”

“There is not much hope of us winning the case,” an Indian government official told Mishra under condition of anonymity.

A decision is expected by the end of September, after India sought but was denied a request to delay the proceedings due to COVID-19 concerns.

In a separate trade policy review (TPR), Canada, the U.S. and Australia have complained that India “has not declared its agri export subsidies for more than eight years.”

Thanks to government subsidies by India and other international producers, the global sugar market continues to be the most distorted commodity on the planet.

Fortunately, U.S. sugar policies of import limits and targeted tariffs protect American farmers and producers from such unfair, market-distorting international competition.

However, some in Congress continue to ignore the reality of foreign government subsidies and are again trying to eliminate the no-cost-to-taxpayers sugar program unilaterally without requiring reforms by countries that are “cheating.”

Instead, Congress should focus on passing the “zero-for-zero” proposal that would eliminate the U.S. sugar program but ONLY in return for international competitors eliminating their government supports and subsidies at the same time.

The only way to assure a true global free market is to assure that all the players are playing on a level playing field without artificial help. Zero-for-zero would do that.  And Congress should pass it.

(Michigan Farm News) – “I’m very proud of the fact that we’ve sustained a sugar policy that has operated at zero cost to taxpayers,” Jack Roney, the veteran sugar economist, said on a recent episode of Groundwork while reflecting on his storied career at the American Sugar Alliance (ASA).

“I’m particularly proud of that because I think our sugar farmers are among some of the best in the world at what they do.”

Roney would know.

After 25 years of working at ASA and nearly 50 years working in agriculture, there might be no one else in America who understands the ins and outs of the sugar industry as well as Roney does.

Luckily, Farm Policy Facts had the opportunity to speak with Roney prior to his retirement in August. (The director of economics and policy analysis position at ASA is now held by Dr. Rob Johansson, who was most recently the chief economist at the U.S. Department of Agriculture.)

One of the main topics of discussion was the importance of strong supply chains, especially when it comes to food. Over nearly two years, there’s been a strategic importance of maintaining domestic production for essential items as America has faced shortages of items ranging from medical face masks to computer chips.

Thankfully, not one food manufacturer ever had to stop production due to a lack of sugar. The domestic sugar industry was also able to adjust to shifts in demand to keep grocery store shelves stocked as more families ate meals at home and found comfort in baking.

“I think this was an important reminder to us of the importance of having a domestic food supply, and the importance of sustaining domestic industries rather than necessarily relying on foreign supplies,” Roney said.

One strength of the U.S. food system, Roney noted, is that America’s farmers and ranchers produce food in a safe and sustainable way. They operate under stringent rules to protect the environment and support its workforce — made easier by incredible advances in farming technology.

“Agriculture is a high-tech industry, it’s not low-tech. The sophistication of our producers is just extraordinary,” Roney said.

Sugar farmers are not only able to maintain our strong domestic sugar supply chain, but also able to invest in sustainable sugar production thanks to America’s successful no-cost sugar policy.

While some critics would like to dismantle this successful policy, Roney shared with listeners how it supports America’s sugar growers when confronted with the reality of the global sugar market, often called the world’s most distorted commodity market.

“Our producers — whether they’re farmers or processors — can compete against foreign farmers or processors on a level playing field. It’s when governments come in, and tilt the playing field, that it’s really unfair,” Roney said.

Thankfully, there’s a bipartisan proposal in Congress called Zero-for-Zero which proposes bringing all countries to the table and eliminating all sugar subsidies. Only then will the United States eliminate its sugar policy.

And for Roney, all his work was invested toward one important mission: preserving the legacies of family farms.

“I’ve been at this long enough that I’ve had the incredible gratification of seeing my farmers pass their farms along to their sons and daughters,” Roney said. “When I describe what I do to people outside of agriculture, what it really comes down to is that I’m trying to help our farmers be able to pass their farms along to their sons and daughters.”