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Senator Calls for Inquiry on new Sugar Policy

This week a senator called on the Senate to investigate a proposed new tax policy which “stakeholders fear would kill the sugar industry.”

The senator filed a Senate Resolution directing the Senate Ways and Means Committee to “conduct an inquiry” on the reform proposal that redefines raw sugar and removes its tax exemptions.

“Groups from the sugar industry are opposing this new (proposal), saying it will kill the industry by increasing the production cost of domestic sugar,” the senator told The Business Mirror. “Industry representatives claim that the tax harms the competitiveness of the local sugar industry and, consequently, threatens the jobs of its farmers and other workers.”

The senator added that before “determining the necessity of the measure, the risk imposed on the industry and the jobs that depend upon it must be seriously considered.”

He emphasized “that economic policies must be designed to make industries competitive in both the domestic and international market” and that any changes should be based “on sound agricultural development and agrarian reform.”

While there are, indeed, such proposals on Capitol Hill to unilaterally eliminate protections for the U.S. sugar industry, the senator in question is not a U.S. senator, and the dispute is not before Congress.

The story came out of the Philippines. You can read it here:

This is yet another example demonstrating how difficult – and potentially dangerous economically – it is for any country to eliminate its government support and subsidy programs for sugar absent a concerted, worldwide effort to get all sugar producing countries to adopt true free-market reforms simultaneously.

That’s why Citizen Outreach continues to support Rep. Ted Yoho’s “Zero for Zero” reform proposal (HCR-39) calling for a global ceasefire on government interventions in the sugar market in which the U.S. would eliminate its quotas and tariffs on imported sugar in return for the simultaneous elimination of sugar subsidies in other countries.

Rep. Yoho’s resolution calls on the Obama administration to negotiate, in effect, free trade agreements with all sugar producing countries under the auspices of the World Trade Organization (WTO).

Sounds like an idea whose time has come…both here and in the Philippines.