Sugar Producers, Processors Call for Border ‘Control'

July 18, 2001

A representative of the domestic sugar producers and processors told The Senate Agriculture Committee Tuesday that sugar farmers seek four policy elements in the upcoming farm bill, but the elements will work only if the United States "regains control of its borders, through resolution of the stuffed molasses and Mexican access problems." One of the main policy elements would be to adopt a form of "inventory management" similar to that in place in the 1990 farm law.

Jack Roney, director of economics and policy analysis for the American Sugar Alliance, told the committee, "Trade policy problems are at the core of our (sugar) oversupply situation." He reported that wholesale refined sugar prices have been running at 22-year lows. "American consumers have received no benefit from the disastrously low producer prices for sugar. In fact, grocers and food manufacturers have continued to raise retail prices for sugar and sweetened products," Roney said.

Addressing the trade policy problems, Roney noted that under the North American Free Trade Agreement and World Trade Organization commitments the United States must import as much as 1.5 million tons of sugar per year -- about 15% of domestic consumption -- "whether we need the sugar or not." Further, Mexico is disputing NAFTA sugar provisions and demanding unlimited duty-free access to the U.S., he said.

"To make matters worse, U.S. borders no longer effectively control the entry into the U.S. market of subsidized foreign sugar outside the quota," he said. A main problem is brought about by a sugar syrup called "stuffed molasses," which is being concocted solely to circumvent our import quota and being shipped into the U.S. through Canada and other countries, Roney testified.

He said the industry is urging the committee members to support legislation to resolve the stuffed molasses circumvention -- the Breaux-Craig Bill (S.753) -- and to support Bush administration efforts to negotiate a workable solution with Mexico.