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Senate maintains U.S. sugar policy

Published on June 15, 2012 3:01AM

Last changed on July 13, 2012 8:29AM

Farm bill amendment would have disassembled
quota system


Capital Press

Senators on June 13 voted against an amendment to the Senate Farm Bill that opponents say would have gutted U.S. sugar policy.

Offered by Sen. Jeanne Shaheen, D-N.H., the amendment would have eliminated the sugar price support, terminated marketing quotas and allotments and increased tariff rate quotas for imports.

The measure, backed by the Sweetener Users Association and the Coalition for Sugar Reform, failed on a 50-46 vote, according to the Associated Press.

"We find it a bit confounding that Congress continues to give sugar special status when it's making (budget) cuts across the board to other commodities," said Jennifer Cummings, spokesperson for both organizations.

While producer organizations have repeatedly said sugar policy represents a no-cost program, it costs consumers $3.5 billion annually in higher grocery bills, she said.

"It's a hidden tax on consumers every time they go to the grocery store," she said.

Due to the policy, U.S. sugar prices are at least 50 percent higher than the world price, she said.

Jack Roney, director of economics and policy analysis for the American Sugar Alliance, was not immediately available for comment. But in an earlier interview with Capital Press, he said the world price is misleading. That price is derived from a residual, thinly traded and highly volatile "dump" market that represents only about 20 percent of all sugar production, he said.

Of the 120 sugar-producing companies, some end up with excess sugar they sell on the world market at a marginal price instead of putting it on their domestic market and depressing those prices, he said.

A study by SIS International Research shows grocery shoppers in the rest of the world pay, on average, 14 percent more for sugar than U.S. consumers. Shoppers in other developed countries pay over 24 percent more for sugar.

In a prepared statement, the American Sugar Alliance stated the Senate's vote is great news for taxpayers and grocery shoppers as well as the country's food security.

"As many senators noted, the current system operates without taxpayer expense and U.S. grocery shoppers enjoy prices that are well below the world average," the organization stated.

But Cummings said the only beneficiaries of U.S. sugar policy are sugar producers. A study by Iowa State University found reforming the policy would not only save consumers money, it would create 20,000 U.S. jobs, she said.

The Sweetener Users Association and the Coalition for Sugar Reform will continue to press for consideration of another amendment, SA 2159, introduced by Shaheen and cosponsored by seven other senators. It would lower sugar prices and reduce restrictions on the sale and trade of sugar, according to sponsors.

That amendment wouldn't repeal the sugar program but would roll back the "most onerous" provisions of the 2008 Farm Bill, Cummings said.


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