Sugar Producers Take Their Turn at the Table

April 27, 2001

The nation's sugar producers want a non-recourse loan program continued for sugar as for other commodities and a retention of the Secretary of Agriculture's authority to limit imports under a tariff-rate quota system. In testimony before the House Agriculture Committee, Ray VanDriessche, Bay City, MI, farmer and president of the American Sugarbeet Growers Association, said policy objectives were needed to "protect taxpayers by generating all sugar producer income from the marketplace," not relying on government for income.

VanDriessche also said the sugar program should be operated at little or no cost to the government and a government inventory management mechanism similar to the 1990 farm law should be resumed but implemented only "once our import-quota circumvention and Mexican import-access problems are solved."

Larry Graham, chairman of the Coalition for Sugar Reform Steering Committee and president of the Chocolate Manufacturers Association, issued a statement that said his group wanted to work with the committee "to help change the current law to more cost-effectively address the needs of small producers, consumers, environmentalists and business. The current program is a failure for everyone, especially the federal taxpayer."

Graham said growers had asked for "special domestic rules for sugar. On the merits, the producers have failed to make a compelling case. There is nothing 'unique' about sugar that justifies such an ill-advised program such as raising loan rates that already produce surpluses and raise domestic prices to more than twice world levels."

VanDriessche said sugar producers wanted the "stuffed molasses" import-quota loophole closed; the Mexico import access issues resolved; the sugar "marketing assessment" fee for fiscal 2002 and 2003 eliminated; the sugar loan forfeiture penalty eliminated as short term actions. Additionally, loan rates should be rebalanced; loans made available on in-process sugar beet and sugar cane syrups; the ability clarified to forfeit sugar loans made in September; processor bankruptcy protection restored for growers, and the 100-point surcharge on sugar loans eliminated.

"As we near the end of these hearings on the future of farm policy, we are now faced with a difficult task," said House Agriculture Committee Chairman Larry Combest (R-TX). "We must use all the knowledge and information we have collected to shape legislation to report out of this committee by this summer.

This process has not been easy, but I am confident that it has provided us with the tools we need to improve farm programs for America's farmers and ranchers. The sugar industry has a distinctive program and its own distinctive set of challenges facing the industry today and in coming years. I want to say that I appreciate sugar growers from different regions coming together to present a unified strategy in light of these challenges."

In his statement, Graham said that last year the federal government spent $465 million to buy sugar that it now stores at a cost of more than $1 million a month. USDA and the Congressional Budget Office now estimate the program will cost taxpayers from $900 million to $1.7 billion during the next decade.

"Despite this expenditure, many sugar growers have experienced financial stress even as program benefits flow disproportionately to a few massive sugar cane enterprises," the statement continued. The General Accounting Office (GAO) estimates nearly 50% of the federal benefits go to just over 1% of the sugar growers, largely plantation owners in Florida, he added.

"The sugar program jeopardizes the United States' ability to gain greater access to foreign markets for its agricultural commodities and value-added food products. Last week's meeting in Quebec demonstrated that developing countries are unwilling to open their markets to our pork, corn and other agricultural products as long as we keep our sugar market closed to their sugar exports," said Graham.

Eighteen organizations and associations make up the Coalition for Sugar Reform with the objective of "market-oriented reform" for the U.S. sugar program. Coalition members represent consumers, environmentalists, think tanks, and advocates of fiscal responsibility, businesses and other interests.