New Sugar Policy Picks Up Key Endorsements
Sugar producers got the thumbs up on their new policy from two key groups-foreign sugar producers and leaders in the banking community-during the industry's annual conference last month.
Harry Kopp, a representative of the Philippines' sugar producers and an active member of the International Sugar Trade Coalition (ISTC), explained at the International Sweetener Symposium that the Philippine industry and the members of ISTC, a group of sugar industries in poor, developing countries, were among the biggest cheerleaders for the sugar provisions of the new Farm Bill.
"We told Congress that developing nations depend on guaranteed access to the American sugar market. U.S. prices tend to be fairer and more predictable than on the world market, which rarely covers the cost of production," Kopp said. "We are pleased that the new Farm Bill protected this access and ensured U.S. prices will remain at stable levels."
Thirty-eight developing nations currently enjoy this guaranteed market access, and the ISTC represents some of the biggest quota holders.
Just two days after Kopp's announcement, Scott Trauth, senior vice president of corporate finance for Denver-based CoBank-one of America's largest agricultural lenders-had this to say:
"The ability for [farmer-owned] cooperatives, their members, and other agribusiness borrowers to repay their debts is one of the most important things we look for when we commit to a loan. The new sugar policy in the Farm Bill gives us that peace of mind. We applaud Congress for its leadership in passing this important legislation."
The new policy provides a slight rate increase for government-backed operating loans-the first sugar loan rate increase in 23 years-and the bill provides for conversion of any unneeded surplus sugar that might result from import commitments into ethanol.
These new provisions will be essential to the recovery of sugar prices-which have improved recently but are still barely above levels of 10 or more years ago, explained Dean Martin, assistant vice president of First South Farm Credit ACA in Thibodaux, Louisiana.
"Economically times are very tough for cane growers in Louisiana right now," he said in August before Hurricane Gustav slammed cane growers and created even bigger financial obstacles.
"Fertilizer prices are way up, diesel is through the roof, and sugar prices haven't gone up enough to help the growers offset these inputs," Martin noted. "We think the Farm Bill will help."
The U.S. Department of Agriculture is currently finalizing plans to implement the new sugar laws, which are slated to take hold on October 1.