February begins the process of officially sorting out presidential and congressional candidates for the November elections. We monitor the candidates’ comments on farm policy, and particularly sugar policy.
In a presidential debate last fall, Texas Sen. Ted Cruz, who strongly opposes most farm-related policies, foolishly attacked Florida Sen. Marco Rubio for his support for U.S. sugar policy, claiming that the money “saved” by eliminating it could be better spent on protecting the country (the military). Sugar grower leaders from every beet and cane state jointly and immediately signed a letter to Cruz to explain that the program cost the taxpayer $0—there was nothing to save. It made it clear that he did not know what he was talking about.
Now that he has the facts, any further attempt to attack our policy will make him look like he is either ignorant or attempting to purposefully mislead the public. Neither of those are good options. Neither he nor his staff replied to the letter, and it appears that he has moved on to other issues.
Sugar Policy Attacks
House Speaker Paul Ryan has called for a more open and deliberative process of “regular order” this year, but that becomes far more challenging with only 111 legislative days in an election year. It gives opportunities to members wishing to propose controversial legislation or amendments to show the folks back home they are working hard.
In that vein, we believe some House and Senate members up for re-election in big sugar-using states will try to offer amendments to harm the policy on any legislative vehicle possible. The anti-sugar lobby has noted that they will be much more “aggressive and creative” in their attempts to modify sugar policy.
So we must be ready at any given moment to respond to any attacks against us. Industry grower leaders will be making hundreds of congressional visits in February to build a strong defense of our sugar policy.
GMO Labeling
Legislation to address GMO labeling is the big issue for agriculture in the first two months of the year. Unfortunately, it was not addressed last year, but congressional leaders and Ag Secretary Tom Vilsack know that this issue must be resolved in order to preempt labeling efforts that create an unworkable patchwork of state labeling initiatives.
This is an extremely important issue for our industry, and we are deeply involved in the “Safe and Affordable Food Coalition,” which represents more than 40 organizations in the food industry working together to address the problem.
With Vermont’s mandatory labeling going into effect in July, the pressure is intense to find a solution that will preempt the state law. The FDA made it clear last year that there is no need to label foods that contain, or are derived from, biotech crops, and there are no food safety issues associated with them.
If there are any differences with conventional crops, the FDA would require that information to be on a label. The battle is between anti-biotech activists who demand the “right to know” if GMO ingredients are in the product, and the scientific, food manufacturing and farming community that believes that if the labeling implies that there are differences in the product where none exists, it is both misleading and harmful to product or brand trust.
Good Data
While February is the shortest month, it is a very important one for the industry. By the end of February, many beet processors are finishing or nearly finished slicing the beets in the outside piles, and we know the condition of remaining beets still waiting to be processed. This provides a good estimate of beet sugar production in the fiscal year.
The cane industry will have passed the frost and hurricane season, so there is a good estimate of cane production. Good data is vital to USDA’s proper management of sugar policy, and the industry is doing everything it can to provide it. By collecting the best data available, USDA will determine its March World Agricultural Supply and Demand Estimates (WASDE). Based on the supply, demand and stock levels, USDA will determine whether or how much additional sugar can be allowed from Mexico under the anti-dumping and countervailing duty suspension agreements for the remainder of the fiscal year. If Mexico does not have the sugar to export to us when we need it, the administration can increase imports from other foreign suppliers after April 1 if the market needs it. The worst scenario is if production is underestimated, demand is overestimated, and more sugar is imported than is needed. This would drive up domestic stocks and depress the market price.
World Trade Organization
The WTO concluded its ministerial meeting on Dec. 19 in Nairobi, Kenya, with a commitment by all nations to eliminate export subsidies. This was a very good step toward addressing the distortions created in global markets. It will eliminate those government practices that provide some form of compensation to producers to export surplus product to the world market. It should be made clear, however, that this agreement will have little, if any, impact on the highly distorted world sugar market. The agreement does not address “dumping,” which is the practice of countries selling surplus sugar or any other good in the world market below the price in their own domestic market or below their cost of production—a problem that is prevalent in the world sugar market. This agreement gives us no relief from that practice, and thus the threat to our industry by dumped subsidized sugar is not reduced.
The WTO trade negotiations have effectively gone nowhere over the past 14 years. More than 160 countries have been caught in gridlock between the developed and the developing countries on the other two pillars of the negotiations—domestic support and market access. These are typically the most sensitive areas of negotiation. Understanding the dysfunction of the WTO negotiations, countries pursued trade agreements with single or multiple countries to either cherry pick desired markets or, more importantly, economically integrate strategic allies.
While preferential access to these markets can be negotiated in those agreements, it is the domestic support pillar that can only be negotiated at the WTO. Making domestic farm policy concessions in these smaller agreements would mean unilateral disarmament with all of the other trading partners, which is both foolish and unacceptable. Countries are now stepping back and trying to figure out a path forward for the WTO.
Distinguished Leaders
This year the ASGA says goodbye to several long-term and dedicated board members who have made personal sacrifices in time and travel to lead our growers: former ASGA Presidents Steve Williams and Kelly Erickson (Red River Valley) and Alan Welp (Colorado), as well as Treasurer Mark Olson and Bruce Solvie (Southern Minnesota), Robert Green (Red River Valley), Chuck Steiner (Minn-Dak) and Butch Layaye (California). Each of these men made a tremendous contribution to solving various challenges and providing opportunities that impacted America’s sugarbeet growers. Their wisdom, leadership and friendship have been greatly valued over the years.