Sugar users welcome introduction of Sugar Reform Act

by Ron Sterk
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WASHINGTON — Sugar users expressed broad support for and urged passage of the 2013 Sugar Reform Act, bipartisan legislation introduced in both houses of Congress Thursday seeking changes to the U.S. sugar program.

“The current U.S. sugar program is a major impediment to job creation for all food manufacturers, including thousands of U.S. bakers small and large,” said Robb MacKie, president and chief executive officer of the American Bakers Association. “Archaic sugar policies have driven costs up for U.S. bakers and consumers to unmanageable levels for far too long. Now is the time for Congress to support reform that will level the playing field and allow bakers and other food manufacturers to create new jobs,” Mr. MacKie said.

The legislation seeks to repeal trade restrictions that limit the secretary of agriculture from allowing additional sugar imports when needed and to repeal the Feedstock Flexibility Program, which channels excess sugar supply to ethanol production. The feedstock program was introduced in the 2008 farm bill and is expected to be implemented for the first time this year as excess sugar supply has pushed raw and refined sugar prices near U.S. Department of Agriculture forfeiture levels for the first time in several years.

The bills also seek to reform domestic supply restrictions, including giving the secretary of agriculture authority to modify or suspend domestic marketing allotments and give the U.S.D.A. greater flexibility in administering the tariff rate quota system for sugar imports.

The Coalition for Sugar Reform also welcomed introduction of the legislation, saying it would roll back the sugar program’s most costly, restrictive and market-distorting provisions from the 2008 farm bill and provide relief to consumers and businesses who have paid a $14 billion hidden tax over the past four years “for the federal government to provide a special interest subsidy to sugar producers.”

“These reform bills would help to modernize one of the most outdated federal programs still in operation, which has driven up the price of U.S. refined sugar — currently about 30% higher than on the world market — and continues to crease unnecessary instability in the market, stifling American economic grown and job creation,” said Larry Graham, president of the National Confectioners Association and chairman of the Coalition for Sugar Reform.

Sugar producers, including sugar beet and cane growers and processors, maintain the sugar program has helped stabilize U.S. sugar prices and production while providing a floor under prices to protect growers. They also maintain that U.S. sugar prices paid by consumers are below sugar prices in many other developed and developing countries, many of which have subsidies that allow them to sell sugar at lower prices on the world market than domestically. Producers also note that U.S. sugar prices have declined more than 50% from late 2011 highs and the market currently faces an oversupply due to large crops in the United States in 2012 and in Mexico (which can ship sugar to the United States duty free under the North American Free Trade Agreement) in 2012-13. They also maintain that jobs have been lost or moved out of the United States for reasons other than sugar prices, mainly labor and health care costs, noting that candy makers’ profits have been strong in recent years.
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