Washington Post Editorial: Congress Needs to Roll Back Subsidies to Sugar Producers

An editorial in today’s edition of The Washington Post calls on Congress to reform the U.S. sugar program, writing:

“Federal policy coddles the U.S. sugar industry through import controls, soft loans and price targets. The result is higher consumer prices — and fewer jobs in the U.S. food industry. Still, for many years Big Sugar and its defenders could claim that the program was designed to avoid any direct expenditure of taxpayer funds and that it had, in fact, achieved that goal.

“Not anymore. The Agriculture Department lost $280 million on the sugar program in fiscal year 2013, with more losses expected next year. A surge of imports from Mexico has driven down U.S. sugar prices — to the point where it’s profitable for processors to take advantage of a U.S. law that lets them forfeit the sugar they posted as collateral for government loans and keep the cash. Stuck with mountains of excess sweetener, the government has two choices: hoard it until prices go up or sell it at a huge loss to the few ethanol makers willing to take it. …

“Now, the sugar lobby says, the United States should adopt a ‘zero-for-zero’ policy: We’ll stop fiddling with the sugar market when everyone else in the world does the same. …

“… Politics 101 says that’s not going to happen soon, so demanding ‘zero-for-zero’ amounts to an excuse for perpetuating policies that benefit U.S. producers at the expense of food processors and consumers. …

“The United States should stand for free trade in sugar and against protectionism. Setting a better example would help.”

Read the full editorial here.

Trick or Treat? Scary Facts About the U.S. Sugar Program

Halloween is here again and candy makers and Members of Congress are calling attention to some of the scariest facts about the U.S. sugar program.

In Halloween cards delivered to all U.S. Senators today, Senators Jeanne Shaheen (D-NH) and Mark Kirk (R-IL) highlighted the frightening cost of the U.S. sugar program as the scariest thing about Halloween.

“Halloween provides a disturbing reminder of sugar’s sweet deal,” Sen. Shaheen said.

“It’s time we end this unfair pricing scheme that protects a select few sugar growers unnecessarily,” said Sen. Kirk.

Also out today is an article in The New York Times, titled, “American Candy Makers, Pinched by Inflated Sugar Prices, Look Abroad,” which looks at how some candy makers are forced to consider moving jobs overseas due to sugar price fluctuation and market manipulation — both the result of America’s failed sugar policy.

Not scared yet? Here are three of the scariest facts about the U.S. sugar program:

1. It has cost taxpayers nearly $300 million since July — all to bail out Big Sugar.

2. It puts an estimated 600,000 jobs at risk in all 50 states.

3. It costs consumers and businesses up to $3.5 billion a year.

Even scarier, the House-passed farm bill not only failed to reform the program, but would also make its damaging and costly effects permanent.

Here’s hoping that this scary program will be reformed before next Halloween comes around!

NCA Unwraps the Facts on Sugar Lobby’s “Zero-for-Zero”

In a blog post today, the National Confectioners Association (NCA), whose President – Larry Graham – chairs the Coalition for Sugar Reform unwrapped the facts on the sugar lobby’s “zero-for-zero” sugar policy proposal:

“… The ‘zero-for-zero’ policy targets other countries’ sugar subsidies. The idea of  meddling in the affairs of other countries before dealing with our own market-distorting subsidies is deeply misguided and also disingenuous. The zero-to-zero proposal has been widely criticized this week from sources like the Cato Institute, adjunct fellow at the Competitive Enterprise Institute Fran Smith, and the Club for Growth.

“Sugar producers are the sole beneficiaries of sugar subsidies here in the United States – subsidies that are currently forcing the federal government to spend $51 million in taxpayer dollars to prop up U.S. sugar prices and costing American consumers and businesses up to $3.5 billion a year. Before we go demanding that other countries reform their sugar policies, it’s time for Congress and the sugar growers to get our own house in order first.

“We continue to urge Congress – as part of the farm bill process or otherwise – to take action this year to reform the costly U.S. sugar program – the only subsidy program that the House-passed farm bill made permanent without a single reform. And to state again what Larry said numerous times in his presentation at the Symposium, we are advocating reform of the sugar program, not repeal. If enacted, the modest reforms that have been proposed in the House and Senate on a bipartisan basis, will ensure that the sugar program works for all stakeholders, including American consumers, taxpayers and businesses.”

 Read the full blog post here.

Heritage: 6 Principles to Guide the Farm Bill

With the House and Senate Agriculture Committees set to mark-up a new farm bill this week, The Heritage Foundation’s Daren Bakst pulled together a few things for Congress to keep in mind in a recent blog post.

1) Central planning is just as bad with agriculture as it is with any other industry. Some in Washington may think, for example, that they can take on the impossible tasks of determining the perfect price for soybeans or the proper supply of sugar. Only the free market, and not centrally planned economic systems, can allocate resources in the most productive manner. Agriculture is an extremely complicated sector, and those who advocate for limited government and free-market principles in all other aspects of the economy shouldn’t create a special exception for agriculture. …

6) Subsidies hurt consumers. The cost of subsidies is not just limited to the burden on taxpayers. Consumers are also harmed because of higher prices that result from artificial attempts to drive up prices, such as through quotas and tariffs. The sugar program, for example, which is essentially one big anti-consumer market distortion, has led to American sugar prices being two to four times greater than world sugar prices.

Read the full blog post here.

Heritage: Be Mine: Sugar Industry Should Welcome Free Trade

In a Valentine’s Day-themed blog post today, The Heritage Foundation’s Ashlee Smith succinctly points out exactly why Congress should reform sugar program as soon as possible this year, writing:

“Valentine’s Day is synonymous with roses, chocolate, and those wonderfully sweet heart-shaped sugar candiesWhat isn’t so sweet about the holiday of love is the ‘love’ that the U.S. sugar program sends to consumers in the form of higher prices and fewer jobs.

“The federal government has been propping up the sugar industry since World War I and sugar farmers are doing everything they can to ensure subsidies and protection policies remain intact.

“The U.S sugar program, included in the farm bill, is a government program creating price supports for American sugar growers. The program places limitations on the amount of sugar that can be imported. Once this limit is exceeded imported sugar faces exorbitant tariffs. Federal limitations on sugar imports force U.S. consumers to pay more per pound than the world sugar price.

“It’s not only sugar prices that are affected. The sugar program leads to higher prices for many products that include sugar like cereal, soda, ketchup, fruit juice, and bread. One study conducted found that the unseen food taxes equate to $3.5 billion in added cost for consumers per year.

“The sugar program isn’t doing a good job of protecting anyone or anything except special-interest groups and inflated prices.”

Read the full blog post here.

22 Major Business, Consumer and Environmental Organizations Push for Sugar Reform in Letter to New Members of Congress

In a letter sent yesterday to new Members of Congress, 22 major business, consumer and environmental organizations called for reform of the current U.S. sugar program this year.

Noting the estimated $3.5 billion annual cost to consumers, the members of the Coalition for Sugar Reform wrote:

“The federal government has no business imposing such extraordinary costs on everyone except the sugar growers and processors. The sugar industry is able to reap record profits when domestic sugar supplies are tight because of government restrictions, and yet pass on the cost of the sugar program to taxpayers when surplus sugar burdens the market. …

“In fact, the sugar reform that is likely to be considered by Congress this year will merely restore sugar policies that growers supported and that were contained in the 2002 farm bill.”

Read the full letter here.

Consumer Advocacy Group Speaks Out Against “Spooky Subsidies”

Happy Halloween! In a blog posted today, one of the nation’s leading consumer advocacy organizations, the National Consumers League (NCL) urged Congress to reform costly, “spooky,” sugar subsidies in the farm bill. Teresa Green, NCL Linda Golodner Food Safety & Nutrition Fellow, wrote:

“Halloween and all of the sweet treats American families buy at this time of year are a reminder of one of many critical issues Congress must address: U.S. sugar program reform. Costing American consumers an extra $3.5 billion a year in higher grocery bills, the sugar program, which began during the Great Depression, is in dire need of reform….

“The U.S. sugar program costs the average family of four $40 per year. This may seem like an insignificant amount, but when multiplied by 300 million Americans, the total cost to U.S. consumers is $3.5 billion every year.

“By artificially raising the U.S. price of sugar, the program acts as a hidden tax on consumers, impacting all products that use sugar. These items include the obvious things like candy, cookies and other treats, but also less obvious products such as bread, tomato sauce, peanut butter and frozen veggies. Furthermore, this ‘hidden tax’ is also regressive, because low-income consumers spend a higher percentage of their income on food.”

To read the full blog post, click here.

The Environmental Costs of the U.S. Sugar Program

As a recent piece by Florida columnist Eve Samples asserts, the costs of the U.S. sugar program are not just economic, they’re environmental. Samples wrote:

“Call it a subsidy or call it a price support. Ultimately, the effect on everyday people is the same: We pay more.

“… Take it from the Coalition for Sugar Reform, a group that includes the U.S. Chamber of Commerce, the libertarian-leaning Club for Growth and
beverage and candy-makers.

“Put in place to support American sugar farmers by keeping their prices artificially high, the U.S. sugar program has proven counterproductive in today’s global economy,” the Coalition for Sugar reform stated in a news release in August.

“The coalition estimates sugar price supports and production quotas cost consumers $3.5 billion a year.

“Why does sugar policy matter for the St. Lucie River?

“Inflated sugar prices prop up the value of land south of Lake Okeechobee — land essential to restoring the southward flow of water to the Everglades.

“… [A]lmost 600 million gallons of water per day were pouring out of the St. Lucie Lock & Dam — much of it from Lake Okeechobee, and some of it from local rain runoff. The freshwater deluge has offset the balance of saltwater in the St. Lucie River estuary, and the fertilizer runoff it carries is suffocating to river life.”

To read the full column, click here.

Americans for Tax Reform: U.S. Sugar Program ‘Not So Sweet for the Economy’

In a recent blog post published on the Americans for Tax Reform website, the group details the costs of U.S. sugar program on American consumers, writing:

“Sugar prices in the United States are kept artificially high through a 3-part system of economic controls.  First, the government imposes a rigid quota system on sugar production. … This cartel structure makes it illegal for producers to sell sugar that exceeds their given quota. The government further controls the sugar market through a two-tiered tariff system that allows U.S. growers to provide about 85% of the market and keeps prices artificially high. Finally, the federal government operates a complicated loan system to ensure sugar prices do not fall below a government-mandated price floor. …

“These market control methods work out very well for the approximately 4,700 United States sugar growers who benefit from them. For millions of US consumers, taxpayers, and workers however, the costs of these policies far outweigh any benefit.

“Analysts estimate that US consumers and businesses pay anywhere from $3.5 to $4.5 billion in higher costs due to the government’s inflation of sugar prices. Taxpayers too, shoulder the burden of the government’s intrusion in the sugar market. The Congressional Budget Office estimates that the surplus sugar the government buys and sells, at a loss, to ethanol producers, will cost taxpayers $374 million over the next decade.”

To read the full blog post, click here.

Sens. Shaheen, Lugar and Toomey Urge Colleagues to Support Sugar Reform

In an op-ed published today in The Hill, Sens. Jeanne Shaheen (D-NH), Richard Lugar (R-IN) and Pat Toomey (R-PA), highlighted growing bipartisan support for reforming the outdated U.S. sugar program and urged their congressional colleagues to build on that momentum.  They wrote in part:

“Congress talks a lot about saving people money — and now we have a chance to put our money where our mouth is.  That’s why we are pushing for bipartisan, commonsense reform to an extravagant sugar price-support program that costs consumers and businesses an estimated $3.5 billion and 20,000 jobs each year.

“Our efforts to reform the sugar program in the Senate garnered record-breaking support and came close to succeeding this summer.  Now Congress needs to continue to build on that momentum.  In doing so, we would protect consumers, help American companies compete and save taxpayers $72 million over 10 years.

“… The momentum for change is clear. … During Senate debate on the farm bill, we saw strong support for our amendments to reform the sugar program, significantly more than the last time similar legislation was introduced in 2001.  We were encouraged by this growing bipartisan support.

“… As we look at ways to help American families and small businesses prosper, no group or program should be immune to change.  Even programs with the best intentions can outlive their usefulness. The sugar program certainly has.”

To read the full text of the op-ed, click here.