Frequently Asked Questions
Following are some frequently asked questions about the issue of sugar policy reform. Please contact us if there are other questions you would like to see on this page, or if you would like to submit a question for consideration.
Why should Congress reform U.S. sugar policy?
The current U.S. sugar program costs American consumers, small businesses and food manufacturers approximately $3.5 billion each year and is directly responsible for the loss of thousands of American jobs. Market-oriented reform of the current U.S. sugar program is needed to put an end to tight sugar supplies, excessively high sugar prices, job losses and unnecessary and wasteful government intrusion on domestic sugar production.
Is it true the current sugar program operates as a “no net cost” program?
No. The sugar program costs both consumers and taxpayers by driving up food prices from the high cost of sugar. In the last four calendar years, the U.S. price for refined sugar ran anywhere from 64 to 92 percent higher than the average world price. Taxpayer costs rose to nearly $300 million in fiscal year 2013 because of the U.S. sugar program, and the Congressional Budget Office projects additional taxpayer costs of $629 million between FY 2014 and FY 2024.
What is the impact of the current U.S. sugar policy on American jobs?
Because U.S. refined sugar prices are higher than world prices, there is an incentive for small businesses and food manufacturers to import sugar-containing products or move plants and factories off-shore. It is estimated that nearly 127,000 jobs were lost in U.S. sugar-using industries between 1997 and 2011. The U.S. Department of Commerce estimates that for every sugar growing job saved through high U.S. sugar prices, approximately three manufacturing jobs are lost. There are fewer than 5,000 sugar farms in the U.S. that benefit from the sugar program, but there are about 600,000 Americans employed in industries that buy sugar.
How does the U.S. sugar program distort markets?
The government controls domestic production by giving each sugar processor an “allotment” — it is illegal for the processor to sell more than this government dictated amount of sugar, regardless of supply and demand conditions. No other current U.S. farm program imposes government controls on how much of a commodity can legally be sold in the United States.
According to the Congressional Budget Office, in coming years, the government will buy surplus sugar and sell it to ethanol plants at a loss, and forecasts $629 million in future sugar program taxpayer expenses between FY 2014 and FY 2024.
If the sugar program were eliminated, would it force small farmers and sugar growers out of business?
No. We need U.S. growers – both beet and cane producers – to ensure we have a healthy domestic supply of sugar at a reasonable price. We cannot operate without them. The difference is we need a sugar policy that is more balanced and is based on free market principles benefiting both domestic growers and sugar-using companies.
Does federal sugar policy only impact bakers and candy manufacturers?
Any company using sugar in making foods and beverages is adversely affected by the current U.S. sugar program, not just candy makers and confectioners. Foods that contain sugar in varying amounts include breads, canned fruit, frozen vegetables, ice cream, jams and jellies, peanut butter, soft drinks, tomato sauce and others.