The Sugar Policy Modernization Act
The Sugar Policy Modernization Act of 2017, (H.R.4265 / S.2086), reforms the U.S. sugar program so that American companies who use sugar as an ingredient in their products have access to adequate amounts of the commodity at reasonable market prices. This legislation provides Congress with the opportunity to provide relief to small businesses and hardworking Americans from burdensome government mandates that have artificially kept sugar prices excessively high for manufacturers.
This bicameral, bipartisan legislation was introduced in November 2017 in the House by U.S. Representatives Virginia Foxx (R-NC) and Danny Davis (D-IL), and in the Senate by U.S. Senators Jeanne Shaheen (D-NH), and Pat Toomey (R-PA).
The Sugar Policy Modernization Act would:
- Ensure no cost to taxpayers. The 2008 farm bill contained new sugar program features that allowed large sugar processors to default on federal government loans, thereby exposing taxpayers to indefensible costs. In 2013, this led to a nearly $259 million taxpayer-funded bailout for sugar producers. The provisions of the Sugar Policy Modernization Act would guarantee that taxpayers would never again have to pick up the tab for loan defaults by large sugar processors.
- Repeal unnecessary trade restrictions. The 2008 farm bill required the U.S. Department of Agriculture (USDA) to set import quotas (also known as tariff-rate quotas) at a legal minimum each year, with very limited flexibility to respond to changing market conditions as needed. The Sugar Policy Modernization Act would repeal these additional restrictions and provide greater flexibility to the USDA when implementing the program.
- Repeal marketing allotments that are unique to sugar production. The USDA sets detailed quotas known as marketing allotments to restrict the amount of sugar domestic producers can sell, imposing company-by-company sales quotas. The Sugar Policy Modernization Act would eliminate the restrictive marketing allotments that are divided among sugar processors.
- Provide more flexibility to USDA in order to ensure an adequate supply to the domestic market. The Sugar Policy Modernization Act establishes the basic requirement that USDA administer the sugar program to provide adequate supplies of sugar at reasonable prices for U.S. businesses and consumers.
- Repeal the Feedstock Flexibility Program. The 2008 farm bill added a program that requires the government, if sugar prices fall below guaranteed levels, to buy surplus sugar and then sell that sugar to ethanol companies, typically at a loss to taxpayers. The Sugar Policy Modernization Act would eliminate this requirement and protect taxpayers from footing the bill for this program