Farm Bill Safety Net

Stop blaming farmers for high prices

Published online: Oct 24, 2023 Feature Rob Johansson, Director of Economics and Policy Analysis, American Sugar Alliance
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As we get closer to the writing of the next Farm Bill, we can expect to see attacks from various sides, such as sugar-using companies that seek cheaper supplies of sugar for food manufacturing.

While we always appreciate seeing our customers do well and we view sugar as an essential food ingredient and component of the U.S. food supply chain, it is difficult to stand by and see multimillion dollar agribusinesses throw stones at the hard working men and women who bring sugarbeet and sugarcane to processors, mills, and refineries and ship sugar to grocery stores and food companies.

The most recent attacks suggest that a new Farm Bill should strip out provisions that provide sugar farmers with a safety net. As an example, the Chicago Tribune recently posted an editorial siding with billionaire food manufacturing conglomerates at the expense of the 11,000 hardworking sugar family farmers in America. The American Sugar Alliance has pushed back in direct letters to the editor in local papers. Americans should be reminded that farmers take a tremendous amount of risk and make very little return while large companies make huge profits. The net revenues of sugar farmers pale in comparison to what those corporate giants make each year. 

The misguided Chicago Tribune op-ed chooses to scapegoat sugar farmers as the cause for price increases. When prices at the grocery store go up it’s because inflation is pushing the costs for most things like labor, marketing, and shipping. Only about 15 cents of each dollar spent on food goes to the farmer in the U.S. Of course, sugar farmers, along with the entire ag sector, have been trying to accommodate rising prices for fertilizer, diesel, labor, and shipping—which has led to higher commodity prices as well.

And food manufactures have had to deal with higher input costs but have been able to push those off on the American consumer in the form of higher prices. In some cases, those food companies have outsourced production to other countries, like Canada and Mexico, to escape the high wage and benefit costs they face in America.

Since the pandemic, major news outlets from the New York Times to the Washington Post and the Wall Street Journal have documented how these big multi-national food manufacturers have been pushing prices higher to generate billions in profits. Candy companies collected nearly $43 billion in sales last year—15 percent over the previous year. 

To accuse farmers, who are operating on slim margins, of being the problem is to deflect shoppers from rightly blaming food companies for price hikes. Instead of turning consumers against farmers, food companies should thank the domestic sugar industry for continuing to provide reliable just-in-time sugar deliveries to them.  

All Americans benefit from domestic sugar production. We provide a reliable and sustainable source of sugar that is made in America. Our domestic supply chain has kept U.S. shelves stocked even during the pandemic. Right now, at American grocery stores, a four-pound bag of sugar is cheaper than it is in 25 other countries, including China, Japan, Argentina, Sweden and France.  

Sugar producers provide an important economic engine to local communities in rural and urban areas, supporting 151,000 jobs and contributing more than $23 billion to the economy. That is especially important to local communities in rural and urban areas where good-paying career-making jobs can be scarce. 

What’s more, we know from recent national polls (Morning Consult), the majority of Americans believe Farm Bill passage is a matter of national security. One of the top priorities identified by respondents was risk management programs that, along with the sugar loan program, serve as a safety net for farmers. 

Dismantling the sugar program and taking away crop insurance would not only harm U.S. farm families and workers, but it would ultimately also hurt billionaire candy companies who have advocated for such a policy approach as they absolutely need the strong domestic sugar production their policies would threaten. About the only group that might benefit from such a reckless policy are some foreign countries who heavily subsidize their sugar industry.

In short, gutting the Farm Bill safety net would be a raw deal for American family farmers, American consumers and taxpayers.