Sweet & Sour

Published online: Aug 08, 2020 Feature Phillip Hayes, ASA
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This column appears in the August/September 2020 issue of Sugar Producer.

The widespread use of foreign government support and subsidies has contributed to a wildly unpredictable global sugar market.

Foreign intervention only continues to rise as nations struggle to prop up their inefficient producers and deal with the overproduction spurred by these same sugar subsidies. As a result, sugar exports are being dumped by dozens of countries on the world market at prices that are half the cost of producing it worldwide and well below their own countries’ internal consumer prices.

The American Sugar Alliance reviews all of the USDA’s Semi-Annual Sugar GAIN reports and compiles all mentions of the various ways more than 20 foreign governments intervene in their sugar markets into one convenient report. The most recent report can be found at www.sugaralliance.org.

This report details a whole host of different interventions: State-run companies. Direct payments. Export subsidies. Government-set prices.

These are some sour policies for such a sweet crop—especially when these foreign-backed interventions are compared to America’s successful policy, which doesn’t rely on subsidies. In fact, America’s sugar policy is designed to cost taxpayers nothing.

The American Sugar Alliance also continues to compile other recent developments affecting sugar sectors in countries around the world, including some covered in the aforementioned 2020 USDA GAIN reports.

Some not-so-sweet subsidy news from around the globe:

  • In June, Thailand approved a 10 billion baht bailout package for its sugar farmers—that amounts to approximately $324 million.
  • A special Sugar Inquiry Commission in Pakistan recently released a report detailing the approximately $177 million in sugar subsidies that have flowed into the coffers of a handful of sugar mills since 1985.
  • Russia has turned from a major world importer of sugar to a growing exporter, with the government allowing for the establishment of sugar export associations to help facilitate further exports abroad.

Meanwhile, America’s strong no-cost sugar policy protects efficient American sugar farmers and workers and ensures that we maintain an affordable supply of this essential ingredient.

But if we were to unilaterally weaken or cripple this successful policy in the face of rampant subsidization, without passing the Zero-for-Zero Sugar Policy, the more than 142,000 sugar farmers and workers the American sugar industry supports would likely face bankruptcy. The multigenerational family farmers that grow sugarcane in three states or sugarbeets in 11 states, and all of the factory workers that process sugar, can’t compete against the billions that foreign treasuries dump into the market.

That’s why the American sugar industry is advocating that Congress pass Congressman Ted Yoho’s Zero-for-Zero Sugar Policy (H. Con. Res. 7) to put a stop to the wave of sugar subsides causing market turmoil. It’s a common-sense proposal that would only drop America’s no-cost sugar policy in exchange for the verified elimination of all foreign sugar subsidies.

It’s time for the Zero-for-Zero Sugar Policy.