Sugar producers target foreign exports

Published online: Mar 12, 2014
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WASHINGTON, D.C.—U.S. sugar producers—having successfully defended farm bill protections for their commodity despite strong opposition by confectioners—say they’ll now prioritize stopping heavily subsidized foreign sugar exporters from saturating the domestic market.

Jack Roney, director of economics and policy analysis with the American Sugar Alliance, said his organization will advocate for the so-called “zero-for-zero” resolution proposed last June by Rep. Ted Yoho, R-Fla.

Yoho’s  resolution, H. Con. Res. 39, cosponsored by lawmakers including Rep. Kurt Schrader, D-Ore., and Rep. Doug LaMalfa, R-Calif., instructs the Obama Administration to lobby through the World Trade Organization for removal of foreign sugar subsidies. The resolution supports the end of U.S. sugar policy once there’s a free global market.

U.S. sugar policy was cost-free to taxpayers from 2008-2012, until oversupply depressed prices. It allows USDA to slow the import of foreign sugar to minimum levels required by trade agreements, limit how much sugar American farmers can sell and divert surpluses for ethanol production.

Roney said the industry’s priority will be pushing Mexico to voluntarily reduce its exports to the U.S. and become a “responsible partner.” The U.S., which must allow full access to Mexican sugar under the terms of the North American Free Trade Agreement, imported 2 million tons of Mexican sugar in the 2012-2013 crop season. 

Deflated prices led the U.S. government to forfeit sugar for ethanol production, which has led prices to rebound to slightly above forfeiture levels.

“We need to see stronger prices than this if a lot of our producers are going to survive,” Roney said.

About a fifth of Mexican sugar is government owned due to buyouts to prevent private producers from failing. Roney said the sugar industry in Mexico, which is forecast to export 1.7 million tons of sugar into the U.S. this year, is on record as requesting that its government enact a market stabilization policy that would level the playing field for U.S. producers.

The U.S. is bound by trade agreements to accept at least 1.5 million tons of combined sugar duty free from 40 foreign markets, but Roney said his organization urges USDA against exceeding that amount in years of oversupply.

He said major sugar exporters such as Brazil, Thailand and India have recently ramped up their sugar subsidies.

“Overall, the U.S. government is aware that foreign sugar subsidies are on the rise rather than declining,” Roney said.

Jennifer Cummings, a spokeswoman for manufacturers with the Coalition for Sugar Reform, said American taxpayers paid $300 million last year to support U.S. sugar producers.

“Instead of pointing the finger at other countries, the U.S. should set an example, tackling our own protectionist subsidies,” Cummings said. “Sugar reform remains unfinished business, and reports last week that USDA may be forced to spend additional taxpayer dollars to purchase sugar this year underscore the importance of continuing the fight for reform.”