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Congress mulls sugar program reform

Published on April 15, 2011 3:01AM

Last changed on May 13, 2011 6:38AM

Supporters say bills would create a free market, lower costs


Capital Press

The U.S. sugar program has come under attack again in Congress, putting the future of cane and beet farmers at risk, industry officials said.

Legislation that would eliminate major portions of the program, including import tariffs and government loans, was recently introduced in both the House and Senate.

Supporters say the bills would finally create a free market and lower the cost of sugar for American consumers.

But industry officials warned that the legislation would open the U.S. to a flood of foreign sugar and force U.S. cane and beet farmers out of business.

The existing sugar program has helped to provide reliable supplies of safe, high-quality sugar to U.S. food and beverage makers, said Jack Roney, director of economics for the American Sugar Alliance. There would be no such guarantee if the program is scraped, he said.

"The consequences for U.S. food manufacturers and consumers would be extremely dire if this bill passes," Roney said, referring to legislation introduced by Sen. Richard Lugar, R-Ind.

"This is an attempt to flood the U.S. market with foreign sugar and force U.S. sugar farmers out of business," he said.

Lugar's Free Sugar Act of 2011 would eliminate sugar tariffs and the over-tariff rates that restrict imports.

It would also eliminate "non-recourse" government loans for sugar processors that act as price supports. If market prices fall below the support level under the existing program, a processor can forfeit the sugar to the USDA instead of repaying the loan.

In a statement, Lugar blasted the program as "one of the worse forms of government intervention in America."

Sugar prices on the world market have recently been about 34 cents per pound. But Americans pay about 20 cents per pound more because of the U.S. sugar program, Lugar said.

He said the program represents "a hidden tax" that has driven jobs overseas and "enriched a handful of a powerful sugar producers in the United States."

Similar legislation has been introduced in the House by Reps. Joe Pitts, R-Pa,. and Danny Davis, D-Ill.

Sugar industry officials reject the argument that the high price of U.S. sugar has forced food and candy makers to close some U.S. plants and move them to other countries.

Other factors, including lower costs for labor, health insurance and environmental compliance, have likely played a big role, Roney said.

Meanwhile, U.S. candy makers keep churning out the goodies, he said.

U.S. candy production increased by 7 percent from 2004 to 2009, according to the U.S. Department of Commerce.


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