The American Sugar Alliance (ASA) wants the world to function as a subsidy-free sugar market.
ASA spokesman Phillip Hayes said that subsidies paid to producers in the world’s big three sugar countries, Brazil, Thailand and India, are being expanded to keep market share from each other. The result is that the price of sugar is at the level it was in the 1980s.
“Prices here in the U.S. have been in the tank for the past 12-plus months,” Hayes said. “To put it into perspective, it’s been the equivalent of $2 corn.”
U.S. sugar producers have received some good news recently regarding the sugar subsidy practices of a foreign competitor. The U.S. Commerce Department ruled that Mexico has been illegally dumping subsidized sugar on the U.S. market.
Hayes said the two governments are currently discussing an appropriate settlement for that case. But that’s not going to reverse the low prices resulting from the many sources of low-priced sugar from other sugar producing countries.
“Obviously our costs of production aren’t stuck at 1980s levels, and that’s created tremendous pressure on the U.S. sugar industry,” Hayes said.
U.S. sugar producers are proposing what Hayes refers to as a zero-for-zero sugar policy, offering to get rid of the U.S. sugar program, but only if other countries get rid of their subsidies.
“We are highly efficient producers and we know that we can succeed in a true free market, and that’s our ultimate objective,” Hayes said. "But what we’re not willing to do is unilaterally disarm.”
Hayes conceded that agreement among the world’s sugar producers will be difficult, but said there’s a chance of success. The problem has become severe enough that “we’ve got to try,” and the global sugar market would function better without producers being subsidized.
“We do believe that countries like India and Thailand and Brazil, who internationally preach their desire for a free market, we’re challenging them: put your money where your mouth is,” Hayes said. “Let’s get rid of the programs and let the best businesses win.”
Source: www.brownfieldagnews.com