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ICYMI: Summarizing America’s Sugar Policy

(Chuck Muth) – The American Sugar Alliance sent the letter reprinted below to all new Members of Congress last week.  We thought it worthwhile to forward to every Member…

Dear Member of Congress:

As Congress debates agricultural issues during the coming session, you may be called upon to vote on the future of the country’s sugar policy. Before casting your vote, we felt it important to explain why the policy exists.

Simply put, America has a sugar policy because foreign governments in Brazil, India, Thailand, Mexico, China, and elsewhere heavily subsidize their countries’ sugar production to gain an unfair competitive advantage. This has created the world’s most distorted commodity market, which is prone to volatile price swings and supply interruptions. Without a strong U.S. policy in place, U.S. sugar producers and U.S. consumers would be left vulnerable to the whims of a handful of unreliable foreign suppliers on a grossly distorted, thinly traded marketplace.

U.S. producers are among the world’s most efficient and are championing a new “zero-for-zero” sugar proposal that would eliminate U.S. policy in exchange for other countries dropping their subsidies and letting a free market form. But unilateral disarmament should not be an option because it would fail to achieve free-market goals, would reward the world’s biggest subsidizers, and would punish an important U.S. industry.

While sugar producers fight for a true global market that’s free of subsidies, the current U.S. sugar policy is working well and operating as designed. It is the least expensive commodity program in the Farm Bill, and it is the only viable safety net available to sugar farm families.

Sugar policy works for taxpayers: Sugar farmers don’t receive subsidy checks, but rather loans that producers repay with interest. It cost taxpayers $0 from 2003 to 2012, ran at no cost again in 2014, and will remain zero- or low-cost in the future unless altered. The only year in the past decade it carried a cost, 2013, was the direct result of Mexico dumping subsidized sugar onto the U.S. market.

Sugar policy works for grocery shoppers: Consumers in the rest of the world pay, on average, 14% more for sugar than Americans, and U.S. food manufacturers today pay the same for sugar as they did back in the 1980s.

Sugar policy works for the U.S. economy: Domestic sugar producers support $20 billion in economic activity and 142,000 jobs in 22 states.

Sugar policy works for foreign allies: America provides market access to 41 countries and is the world’s biggest importer, which explains why so many developing countries support the current U.S. sugar policy.

Sugar policy even works for its opponents: Since the current policy took hold, large confectioners have increased production and boasted impressive profit margins.