Congratulations on producing and delivering a phenomenal beet crop this year. Great growing and harvest conditions (except for some warm temperatures) made for a very successful year. There is a certain exhilaration you get when you work very hard over long periods of time and end with a successful conclusion. The sugar industry experienced that on many fronts in the last few months. Let’s look at two of them.
Mexico
On Oct. 20, the U.S. International Trade Commission voted unanimously (6-0) to uphold the preliminary determination that the U.S. sugar industry had been injured by the subsidies and dumping of sugar from Mexico, and that our industry was likely to be harmed in the future if price floors and restrictions were not kept in place to counteract Mexico’s actions. The combined duties would have ranged between 48 percent and 84 percent of the import price. They would have been so high that they would have effectively terminated sugar imports from Mexico.
This is a very strong and historic vote by the commission. It will bring tremendous relief and certainty to our industry. It puts the control to balance the U.S. market back into the hands of the U.S. sugar policy administrators at USDA. Under suspension agreements negotiated between the U.S. and Mexican governments on Dec. 19, 2014, USDA will determine the amount of sugar that is imported duty free from Mexico each year. That sugar must enter our market at values not less than those established in the suspension agreements.
It took at least two years of intense legal work to prepare, file, investigate and argue the anti-dumping and countervailing cases. Much of the success of this effort is credited to our outstanding legal team (Cassidy, Levy, Kent) and growers and processors in our industry who spent countless hours pulling together volumes of documents and data to show injury.
While the final determination was successful, there is still much work to do. It’s important to assure that Mexican exporters, international trade houses and U.S. importers are in full compliance with the suspension agreements. In order to determine the right amount of imports, there is a critical need for those importing and storing sugar to provide such data to USDA. It should also be noted that the suspension agreements continue to be contested by Imperial Sugar Company in the Court of International Trade in New York City. Their argument is that the suspension agreements do not completely remove the injury from all parties. The case will go well into 2016.
The suspension agreements may be reviewed annually, modified if both governments agree and last for five years. If at the end of the five years our industry and government believe the agreements are important to keep in place, we can work to have them renewed for an additional five years. It should be noted that Canada has had anti-dumping duties on the importation of sugar from the U.S. for 20 years, and they were just renewed in October for another five years.
Trans-Pacific Partnership
The final round of negotiations of the 12-country trade pact was completed in Atlanta in late September and early October. As of this writing, the text has not been released for review due to the complexity and number of countries involved, the legal “scrubbing” of the documents and delays as a result in the change of administration in Canada.
Once the text is released, the Agricultural Technical Advisory Committee for Sweeteners (of which I am a member) will review it and write a report to Congress on our views of the sugar provisions of the agreement. Our understanding is the agreement would allow additional access of sugar and sugar-containing products from several countries, primarily from Australia and Canada, but in amounts that would not harm our domestic sugar policy. Additional imports from these countries would come out of the amount of sugar allowed to come into the U.S. from Mexico under the side agreements. It is important to express our appreciation to the negotiators for working closely with our industry and holding firm throughout the course of the negotiations. Congress is likely to consider passage of the agreement in the first quarter of 2016.
Crop Insurance
As the House and Senate leadership and the White House crafted a two-year budget deal in October, they cut $3 billion out of crop insurance over a 10-year period. With only 48 hours to fix this problem, your grower leaders joined with agriculture leaders from around the country and the bipartisan House and Senate Agriculture Committee leaders to strongly object to actions that would threaten our important risk management providers. There is a commitment to reinstate the funding and make the cuts in other parts of the budget “outside the jurisdiction of the Agriculture Committee.”
Now we have to make sure that those commitments are honored throughout the appropriations process in December. This is a great example of how quickly and effectively agriculture can organize and work together against opening and harming parts of the farm bill.
2016 ASGA Annual Meeting
The 2016 annual meeting will be held Feb. 7-9 in Scottsdale, Ariz. Registration opens Nov. 6. Watch for your invitation by email or register online at www.americansugarbeet.org for program, location, tour and other information.
The theme for the meeting will be “Succeeding in Rapidly Changing Environments.” Program topics and speakers will address trade (Mexico, TPP, TTIP, WTO); technology (biotech); communications (biotech spokeswomen and social media); marketing (labeling); policy (farm and fiscal); politics (2016 elections) and industry (new ASGA grower leadership).