Leader says act would 'wreak havoc' on food security

By CAROL RYAN DUMAS

Capital Press

Industry leaders say legislation that would end the federal sugar program would drive U.S. producers and processors out of business and put consumers at the mercy of foreign suppliers.

The Rural Economic Farm and Ranch Sustainability and Hunger Act, introduced in both houses Oct. 6 by Sen. Dick Lugar, R-Ind., and Rep. Marlin Stutzman, R-Ind., would repeal the federal sugar loan program, eliminate tariffs and quotas on imports, and eliminate limits on how much U.S. sugar processors can sell annually.

Seventy percent of food on the grocery store shelf contains some sugar, and eliminating the sugar program would threaten supply for food manufacturers, Luther Markwart, executive vice president of the American Sugarbeet Growers Association, said.

"When food security depends on this supply, you're going to wreak havoc," he said. "When Lugar and Stutzman say they're just going to throw this overboard, it's not a tummy tuck or a facelift, it's an autopsy."

The sugar industry supplies 146,000 jobs and $20 billion annually in economic activity. The current sugar program stabilizes the industry and supply to sugar users and consumers, he said, and runs at no cost to the government.

The current program works well for both farmers and processors, he said.

Thirty-three sugar mills and processing facilities closed their doors between 1996 and 2008. Only two plants have closed under the current program.

"We finally have a policy that works," he said.

While sugar users have argued that import quotas and tariffs keep domestic prices above the world market rate, growers and processors say they protect against unfair trade practices and prevent countries from dumping sugar on the U.S. market and driving down prices.

"We'd be flooded with foreign sugar. It would depress our prices and put a lot of guys out of business," said Jack Roney, director of economics and policy analysis for the American Sugar Alliance.

Lost production here would cause U.S. demand to be supplied on the world market, and U.S. consumers would end up paying more for sugar and food, he said.

U.S. food manufacturers would be waiting on a slow boat from Brazil and other countries if sugar policy were eliminated, he added.

"Some food manufacturers advocate an end to sugar policy, but we think they would quickly regret it," he said.

Domestic production would be a fraction of what it is today, because it would push prices below the cost of production, said Paul Ryberg, president of the International Sugar Trade Coalition, a nonprofit coalition of sugar industry groups in nearly 20 developing countries.

"We would be completely dependent on a handful of foreign suppliers, primarily Brazil and Australia," he said. "We'd be importing 75 percent of our sugar instead of 25 percent."

REFRESH

The Rural Economic Farm and Ranch Sustainability and Hunger legislation, recently introduced in Congress, would:

* Repeal the loan program, wherein cane and sugar beat processors can forfeit their sugar used as loan collateral to the government if market prices fall below the loan rate.

* Eliminate sugar import quotas and over-quota tariffs.

* Eliminate market allotments by USDA that impose a limit on how much U.S. processors can sell annually.