A study commissioned by the American Sugar Alliance shows Brazil provides nearly $2.5 billion a year in sugar subsidies, greatly distorting the global sugar prices.
There are direct sugar subsidies, says study author Patrick Chatenay, but also hidden subsidies in Brazil - which he says come from ethanol production there.
"That hidden part of the industry impacts considerably the competitiveness of the other side, which the outside world sees more of the sugar side."
Chatenay says policies in Brazil and other countries make sugar one of the world's most distorted commodity markets and the world price is a "dump"price, "That should never be used as a yardstick to measure which benefits or costs may accrue from true free trade." Chatenay spent years in the sugar industry and works for ProSunergy, based in the UK.
Jack Roney, with the American Sugar Alliance, says the study is being presented to lawmakers on Capitol Hill for the formation of a new farm bill. He says it underscores the importance of maintaining the current U.S. sugar policy that protects consumers and sugar producers and exposes, for the first time, the depth and reach of Brazil's sugar subsidies.
Source: brownfieldagnews.com