Confectionery Industry Is Sour On U.S. Sugar Subsidies

Houston Chronicle
Op-ed By: Eric Atkinson, President, Atkinson Candy Co.

Excerpt: As the debate over reform of the U.S. sugar program heats up again in Washington, companies like mine continue to bear the brunt of legislative inaction. Our representatives in Congress should take any opportunity this year to adjust the costly sugar subsidy program because propping up the sugar-producing industry at the expense of taxpayers, consumers and businesses is unsustainable and unacceptable. This is one reason we are joining our industry colleagues in Washington, D.C., this week: to impress upon members of Congress, government officials and other key stakeholders the important economic impact our industry has on the country.

The industry’s growth is being stifled by outdated policies like the U.S. sugar program. The United States is home to some of the highest sugar prices of any major market in the world – 58 percent higher than the European Union. Congress has had opportunities to reform the sugar subsidy program on previous occasions, but high sugar prices continue to hold us back. We need a policy and regulatory environment that will keep the economy vibrant and continue to create opportunities for us to provide jobs here in Texas and in communities across the country.

Read the full op-ed here.

Congress Should End Sugar Program That Hurts Consumers

The Hill
Op-ed By: Leslie Paige, Vice President, Citizens Against Government Waste

Excerpt: The beneficiaries of current U.S. sugar policy are not American consumers. They unknowingly foot the bill for the program through a hidden tax on sugar-containing products — including everyday staples like bread, pasta and peanut butter — that are more expensive as a result of the high cost of sugar in the United States. This hidden tax cost American consumers and businesses roughly $3.5 billion annually between 2009 and 2012.

The beneficiaries of America’s Depression-era sugar program are not the taxpayers. In fiscal year 2013, the U.S. Department of Agriculture paid nearly $300 million when it was forced to take actions mandated by the program to guarantee price levels and bail out sugar producers. The Congressional Budget Office estimates that U.S. sugar policy will cost taxpayers an additional $115 million over the next 10 years.

The only beneficiaries from the U.S. sugar program are a small, special interest group of sugar producers.

Read the full piece here.

How US Sugar Policies Just Helped America Lose 600 Jobs

The Daily Signal
Commentary By: Bryan Riley, Jay Van Andel Senior Analyst, Heritage Foundation

Excerpt: The manufacturer of Oreo cookies recently announced plans to move production of Oreos from Chicago to Mexico, resulting in a loss of 600 U.S. jobs.

This should be a wake-up call to defenders of the U.S. sugar program and other job-destroying trade barriers.

The leading ingredient in Oreos is sugar, and U.S. trade barriers currently require Americans to pay twice the average world prices for sugar.

Sugar-using industries now have a big incentive to relocate from the United States to countries where access to their primary ingredient is not restricted.

If the government wants people making Oreo cookies and similar products to keep their jobs, a logical starting point would be to eliminate the U.S. sugar program, including barriers to imported sugar.

Read the full piece here.

The Sugar Scandal

Wall Street Journal

Excerpt: Americans pay nearly twice as much per pound as foreigners do for sugar, thanks to U.S. import restrictions and subsidies. We’ve tilted at this corporate welfare for decades, but new political forces are aligning to take another run.

The absurdity of the federal sugar program is legendary. Every year the government grants sugar processors nonrecourse loans linked to the amount of sugar the government says they can produce at a set price per pound: 18.75 cents for raw cane sugar and 24.09 cents for refined beet sugar. If the market price is below the loan price when it’s time to sell, the processors simply forfeit their crop to the U.S. Department of Agriculture in lieu of repaying the loan. They can still make a profit thanks to the price guaranteed by the loan.

Read the full editorial here.

Seizing The Mantle Of Leadership On Sugar Policy Reform

The Hill
Op-ed By: John Downs, Chairman, Coalition for Sugar Reform, and President, National Confectioners Association

Excerpt: Maintaining the status quo on America’s sugar policy is unsustainable and unacceptable. Congress should take any opportunity this year to reform the costly sugar subsidy program, because propping up the sugar-producing industry at the expense of taxpayers, consumers and businesses is the kind of crony capitalism the American people have grown tired of seeing — and frankly, that Washington must aggressively confront.

Because of Depression-era policies preserved by large political donations by sugar producers, the United States is home to some of the highest sugar prices of any major market in the world. Currently, prices of refined sugar in the United States are 58 percent higher than those in the European Union. There are many factors affecting domestic and global sugar prices, but one thing is for sure, if Congress continues to rubber-stamp the flawed sugar subsidy program in farm bill after farm bill, high sugar prices and taxpayer bailouts will continue to dog economic growth in the United States and threaten American jobs.

Read the full op-ed here.

Big Corn vs. Big Sugar Could Have a Sweet Outcome for Taxpayers

Washington Post
Column By: Charles Lane

Excerpt: In the never-ending fight against corporate welfare, the forces of fairness and economic rationality may have found a winning strategy: Divide and conquer.

Sometimes business lobbies leave one another’s subsidies and tax benefits alone, for fear that a general rout of all rent-seekers might ensue. This is why, for example, we have an annual “tax extenders” bill, which simultaneously renews a few dozen special breaks in the Internal Revenue Code that could never survive politically on their own.

… And now comes news of more blessed discord, this time among the agriculture lobbies. The Corn Refiners Association, headed by giant grain processors such as Cargill and Archer Daniels Midland, is taking aim at the federal sugar subsidy program — which shares both Ex-Im’s birth year, 1934, and its propensity for wasting resources and distorting markets.

Perhaps you did not know that it is unambiguously in the public interest for the United States’ sugar farmers and refiners to make a profit, even though many other countries produce this fungible, but dietarily dubious, commodity at a lower cost.

Well, Congress, well-lubricated by the sugar lobby, believes that it is, and hasn’t really revisited that conclusion for decades. And so we have country-by-country quotas on imports, buttressed by domestic price supports.

Read the full piece here.

Corn Syrup’s DC Attack on Sugar Could Hit Minnesota Beet Industry

Minneapolis Star Tribune
By Jim Spencer

Excerpt: An unexpected declaration of war by corn syrup makers against sugar refiners in the nation’s capital will likely resonate in Minnesota’s Red River Valley.

The Corn Refiners Association, a trade group made up of four giant agribusinesses including Minnetonka-based Cargill, has hired lobbyists to gut a part of the U.S. sugar program that lets sugar makers pay back government loans with sugar instead of cash. Minnesota’s nation-leading sugar beet growers consider the program’s controversial but long-standing combination of price supports, loan guarantees and import quotas crucial to their survival.

Read the full piece here.

U.S. Big Corn Goes After Old Foe, Sugar, With New Lobbying Tactic

By: Michael Hirtzer

Excerpt: The powerful U.S. corn lobby is launching an unusual offensive against the country’s sugar sector, an old foe in the lucrative sweetener market: seeking to overturn the controversial, near-century old U.S. sugar program.

The Corn Refiners Association, which represents high-fructose corn syrup producers, has hired Washington lobbyist firm, the Alpine Group, to challenge sugar’s long-protected status, a spokesman for the organization said on Thursday.

The sugar program, which restricts imports, sets price floors and provides government-backed loans to cane and beet processors, is considered one of the most generous in the U.S. Farm Bill that passed a year ago.

“The sugar loan program is an embarrassment,” Corn Refiners chief executive officer John Bode said in a statement. Its members include Archer Daniels Midland Co and Cargill Inc.

Read the full piece here.

Exclusive: Corn Refiners Declare War on Sugar, Conservative Groups Jump Onboard

Washington Post
By: Tom Hamburger and James Hohmann

Excerpt: For decades, it’s been an unspoken rule among Washington’s agricultural lobbyists: advocates for one crop do not attack other crops, so that everyone’s benefits can be protected.

But a leading member of the traditionally united community plans to do just that: the Corn Refiners Association is about to invest heavily in an effort to unwind the lucrative breaks afforded to sugar, which are among the most generous in U.S. agriculture.

… While other crop subsidies have withered, Washington’s taste for sugar has been constant. The sugar program, which has existed in various forms since the 1930s, uses an elaborate system of import quotas, price floors and taxpayer-backed loans to prop up domestic growers, which number fewer than 4,500.

Sugar’s protected status is largely explained by the sophistication and clout of a small but wealthy interest group that includes beet farmers in the Upper Midwest, cane growers in the South and the politically connected Fanjul family of Florida, who control a substantial part of the world sugar market. That mix of factors has led to an eclectic coalition on sugar’s side, from Sen. Marco Rubio (R-Fla.) to Sen. Al Franken (D-Minn.).

“While every other farm support program has received multiple rounds of reforms, big sugar has not been touched,” said John Bode, CEO of the Corn Refiners group.

Read the full piece here.

House Introduces Sugar Reform Bill

American Shipper Magazine
By: Chris Gillis

Excerpt: The U.S. House introduced the 2015 Sugar Reform Act, which promises to reform the country’s 1930s-era sugar trade program.

The bill is the companion legislation to S. 475, which the Senate introduced on Feb. 12.

The Sugar Reform Act would provide the U.S. agriculture secretary with the flexibility to adjust marketing allotments and import quotas to stabilize the U.S. sugar market when necessary.

“We ask lawmakers to think of their constituents, the American consumers and taxpayers who continue to foot the bill for the U.S sugar program, which the Congressional Budget Office forecasts will cost taxpayers $115 million over the next 10 years,” said the Coalition for Sugar Reform in a statement. “It is time to address the shortfalls of America’s protectionist sugar policy. We call on lawmakers to support this legislation.”

Read the full article here.