Sugar Fight Ain’t So Sweet

USA Today
Column By: Ike Brannon, Former Chief Economist, House Energy and Commerce Committee, and Current Fellow, George W. Bush Institute

American sugar producers have one sweet deal. Under what’s euphemistically called the “sugar program,” they keep out foreign competitors through high tariffs, prop up domestic prices with crop allotments and backstop their risk through government-guaranteed loans. Attempts to strip Big Sugar of some of its unique protections in the recent Farm Bill were defeated by a coalition of members of Congress from the Southern states producing cane and the beet-sugar-producing states in the Midwest and West.

The sugar program, says the Department of Agriculture, supports U.S. sugar prices above comparable levels in the world market. That’s an understatement. Last year, our government spent $259 million directly to keep sugar prices high, and U.S. consumers paid an even higher tax.

Read the full column here.

Sugar Users Cite C.B.O. Forecast of Sugar Program Costs

Food Business News
By: Ron Sterk

The Coalition for Sugar Reform cited the Congressional Budget Office’s April 2014 Baseline for Farm Programs as further reason to change the U.S. sugar program.

“The sugar producers’ claim over the years that the U.S. sugar program operates at ‘no net cost’ is clearly false, as it has been for some time,” said the Coalition, which represents sugar users.

The C.B.O. forecast the sugar program will cost $629 million between fiscal year 2014 and 2024, with the biggest chunk of that, $238 million, forecast for 2014. Costs were forecast at an average of $39.1 million annually in subsequent years.

The U.S. Department of Agriculture paid about $259 million for sugar industry loan forfeitures and other supports in fiscal 2013. It was the first time in nearly a decade that the U.S.D.A. had incurred costs in the sugar program.

Read the full article here.

Are Sugar Tariffs Raising the Cost of Your Easter Basket?

Heritage Foundation’s The Foundry
Blog Post By: Tori Whiting and Michael F. Mo, Members, Young Leaders Program, The Heritage Foundation

Easter has arrived, and so has everyone’s favorite bunny rabbit. While kids are excited about their chocolate bunnies, Peeps, and jelly beans, parents continue to pay more than they should, and the U.S. government is to blame. Since the Great Depression, import quotas, tariffs, and subsidies for domestic sugar producers have made the price of sugar in the U.S. higher than the average world price.

Each year the government establishes import quotas to prevent the U.S. from importing “too much” sugar from other countries. After the quota is met, refined sugar imports are penalized with a tariff of 16.21 cents per pound. This means that box of Peeps the Easter Bunny left—along with everything else that contains sugar—actually costs more than it should. Because the quota drives up the price of sugar, extra money goes into the pockets of U.S. sugar producers at your expense.

Read the full blog post here.

No Country for Hard Candy: Production Stays in Mexico Until US Adopts ‘Level Playing Field’ Sugar Regime, Says Spangler Candy

Confectionery News
By: Oliver Nieburg

U.S. headquartered firm Spangler Candy says it will not move large volumes of its production back to the U.S. from Mexico until the U.S. government creates a domestic sugar regime that matches world prices.

The Farm bill was written into U.S. law as the Agricultural Act of 2014 last month. It included a five-year continuation of the existing sugar policy.

The move was applauded by US sugar growers, but left a bitter taste for US sweet manufacturers.

Kirk Vashaw, president and CEO of Spangler Candy, told us: “Right now U.S. companies such as ours are at a disadvantage because we have to pay a much higher price for sugar and sugar is the main cost in our product.”

Read the full article here.

Trade Agreement Could Sweeten Life for Candy Makers

Wall Street Journal
By: Alexandra Wexler

U.S. candy makers are hoping that trade partnerships can get them what the farm bill could not—access to more sugar from the global market.

U.S. sugar users, including bakers and candy companies, have been fighting to overhaul the federal price-support program for the sweetener for decades.

Last month, they lost their latest battle when the farm bill–where agricultural policy is set for the next five years–was signed into law with no changes to U.S. sugar policy. So for now, the price supports and the import restrictions that force U.S. companies to pay more for sugar than many of their international rivals remain in place. But candy makers aren’t waiting another half decade to tackle the program again.

“There are other ways that we can impact gaining additional access to sugar,” said Liz Clark, vice president of government affairs at the National Confectioners Association, an industry group, on the sidelines of a conference in Miami. “We have some opportunities in the trade sphere now.”

The Trans-Pacific Partnership, a pending trade pact that would include the U.S., Japan, Australia and nine other countries, is the candy group’s next target as a vehicle for sugar reform.

Read the full article here.

Sweetener Users Welcome USDA Under Secretary’s Remarks on Sugar Policy, TPP; Continue to Call for Policy Reform

International Dairy Foods Association
Press Release

The prospects for U.S. sugar policy and opportunities offered by the Trans-Pacific Partnership and the Transatlantic Trade and Investment Partnership were just a few of the topics covered this week at the 2014 International Sweetener Colloquium at the St. Regis Monarch Beach in Dana Point, Calif. The event drew 450 industry professionals from the United States, Australia, Canada, Mexico, New Zealand, Germany and Turkey, maintaining the high level of attendance reached in recent years.

Hosted by IDFA and the Sweetener Users Association (SUA), the colloquium addressed the sweetener industry’s latest challenges, obstacles and opportunities with presentations from a wide range of speakers. Clay Hough, IDFA senior group vice president, serves as SUA treasurer, a position he has held for the past six years.

Read the full press release here.

Farm Bill Leaves A Sour Taste

Chicago Tribune
Column By: Steve Chapman

The name “Chicago,” according to local lore, came from an Indian word meaning “stinky onion.” But for decades the city had a different aroma, wafting from an array of candy factories. It was a sweet bonus of urban life. Because of a little-known government program, though, it has largely faded away.

In 1990, Brach’s Confections Inc. threatened to close a West Side factory that employed 1,100 people. The candy-maker said it would move to Mexico or Canada unless the federal government acted to reduce the artificially inflated cost of sugar. Washington ignored the threat, and Brach’s found ways to keep the plant going. But in 2003, it closed the factory and sent much of the work to Mexico.

The reason for the move was a federal undertaking whose entire purpose is to prop up the price of sugar for the benefit of a small number of growers. It does so by restricting imports, limiting how much farmers can plant and guaranteeing them a certain price. These methods work: The price of sugar in this country is usually double or triple the price in the rest of the world.

Read the full column here.

Mark Kirk, Danny Davis Say Federal Support for Sugar Farmers Could Cost Jobs

Associated Press

Republican U.S. Sen. Mark Kirk and Democratic congressman Danny Davis say they want an end to federal government price protections for sugar farmers.

The Farm Bill that passed this month leaves intact the government’s depression-era program, which supports prices and protects growers from foreign competition.

Candy makers and other food and beverage companies long have said the protections artificially restrict supplies, force consumers to pay more and only benefit a few thousand well-off growers.

Read the full article here.

More Candy For The Sugar Industry In Recently Approved Farm Bill

Sacramento Bee
Column By: Bruce Maiman

It’s not a sexy issue. Indeed, with last week’s passage of the farm bill, little can be done about it now, but the inequity, audacity and hypocrisy associated with the politics of sugar cry out for comment.

The U.S. sugar program is a collection of import restrictions, price floors and taxpayer-backed loans designed to prop up some 4,500 domestic sugar growers while costing everyone else billions in higher prices, lost jobs and preposterous bailouts.

“It’s the most constrained and lucrative subsidy in the entire farm bill,” Rep. Jackie Speier, D-Hillsborough, told me.

Read the full column here.

Statement By Senator John McCain On Farm Bill Conference Report

Office of Senator John McCain

U.S. Senator John McCain (R-AZ) today delivered the following statement on the floor of the U.S. Senate regarding opposing passage of the Farm Bill conference agreement.

“… Over the past year, sugar subsides and forfeitures have cost taxpayers $258 million while over 640,000 tons of sugar was handed over to USDA. Combined with import tariffs and marketing controls, the USDA sugar program cost consumers over $3 billion each year. It is one of the most obscene federal farm subsidies ever conceived and this Farm Bill does nothing to reform it.”

Read the full floor statement here.