Industry Leaders Hold Off Sugar Reform Act

It's Likely to Resurface in the Months Ahead

Published in the May 2013 Issue Published online: May 30, 2013 Luther Markwart | Executive Vice President
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U.S. Agriculture Secretary Tom VilsackSugar Policy Threats: We have always known that opponents of U.S. sugar policy would look for any opportunity to eliminate various provisions of the policy-or the entire policy-wherever they could find a reasonable legislative opportunity and muster the votes in 2013.

We noted months ago that early congressional action on the debt ceiling, continuing resolution (to fund the government through Sept. 30) and the House and Senate budget bills would be potential legislative vehicles.

Given the lax rules in the Senate for the ability to amend legislation, this is where opponents were planning to strike, first on the continuing resolution, or as a backup, the budget resolution. The fight against our policy would be led by New Hampshire Sen. Jeanne Shaheen (D) along with 12 cosponsors; Sens. Lamar Alexander (R-Tenn.), Kelly Ayotte (R-N.H.), Dan Coats (R-Ind.), Christopher Coons (D-Del.), Bob Corker (R-Tenn.), Richard Durbin (D-Ill.), Dianne Feinstein (D-Calif.), Mark Kirk (R-Ill.), Frank Lautenberg (D-N.J.), John McCain (R-Ariz.), Rob Portman (R-Ohio) and Pat Toomey (R-Pa.).

The proposed amendment would have been their "Sugar Reform Act of 2013," which would remove the improvements to the sugar provisions made in the 2008 farm bill and mandate an oversupply in the market to keep prices depressed at the forfeiture level. After a tremendous amount of work by our industry leaders, and senators and their staffs from beet and cane states, the opponents chose not to offer the amendment and face likely defeat. They are likely to hold it for the farm bill consideration in the months ahead.

Farm Bill: There is a strong desire by both houses and both parties to complete a farm bill this year. There is talk about moving forward to "marking up," or drafting a bill, in the respective Agriculture committees in late April, but May would probably be more realistic.

The timing and path forward for the farm bill in the respective houses are still uncertain but should be further clarified once the bills are reported out of the respective Agriculture committees. The main battle will be over the level of funding for food stamps ("SNAP"), dairy policy and addressing the concerns of southern crops in the Senate bill.

Grower Congressional Visits: Beet and cane grower leaders worked shoulder-to-shoulder and walked the halls of Congress in February and March to explain the importance of current sugar policy to members of Congress and their staffs.

Thank your grower leaders for taking time out of their busy schedules to do this essential work in the face of strong and relentless opposition by our customers. Their time and effort has provided tremendous value to our industry's efforts to get a farm bill passed.

2013 Planting Intentions: On March 29, USDA released sugarbeet planting intentions for 2013 that showed an expected 2 percent decrease in acreage from last year.

What is not captured in these projections is the time the crop is planted, which will be a significant change from last year. A normal production year is about the best we can expect at this point.

Oversupplied Market: Foremost on growers' minds are the deep concerns regarding a grossly oversupplied market.

The USDA is working very hard to look at various ways to address the problem. This is not a simple solution because of Mexico's large crop and unfettered access to the U.S. market.

I am confident that U.S. Agriculture Secretary Tom Vilsack and his team are looking at all the options to do what they can to bring the market back into balance. Given that any solution(s) have market implications, they must do a good deal of work internally and confidentially. When they are ready, they will come forth with the best possible solution in an effort to avoid forfeitures that could occur Aug. 1.