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Reining in Special Interest Sugar Supports

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The House Agriculture subcommittee that deals with specialty crops, rural development and foreign agriculture is scheduled mark up the sugar program soon. Almost nothing more forcefully symbolizes the challenge to reform the 2007 Farm Bill than the decision that has been made by the committee leadership to just extend the current program for the next five years.

Sugar is perhaps the most protected item in American agriculture. There's an elaborate system that keeps the prices that are paid by American consumers and sugar-using industries artificially high - two to three times the world price. If the price ever drops below a fixed level, imports from countries that can produce sugar more efficiently and more cheaply are severely restricted. Anything above a tiny amount of sugar entering the country is subjected to a 100% tax.

This system translates into very substantial costs to the consumer and businesses - nearly $2 billion, according to one study by the nonpartisan General Accounting Office. This suggests that the American economy as a whole would be significantly better off if the whole program were scrapped, just wiping out all the winners and losers and special benefits.

The impact on the economy extends far beyond subsidies. We lost thousands of sugar-using jobs, for instance, when candy manufacturers left New England and Chicago for Canada because the cost of the basic sugar their industry needs was so much cheaper north of the border. If we're concerned about overall employment in the American economy, there are about 10 times as many jobs in the sugar-using industry as there are in this artificially protected industry growing both cane and beet sugar.

There are other costs as well. As cane sugar production skyrocketed in Florida near the Everglades , from less than 70,000 acres in the early 1960s to over 450,000 today, there have been severe environmental consequences. The encroachment of cane sugar production and the runoff into the Everglades is one of the reasons that the federal government is spending $8 billion cleaning up and trying to restore the ecological damage to this national treasure.

Other agricultural industries have also paid a price for our protecting sugar in each of our trade agreements. Because it's the most protected trade item, the United States, in negotiating trade agreements, has made exceptions for the sugar industry that have harmed other industries and consumers. To protect sugar interests, the US allowed Australia to protect its cattle industry, which has hurt American cattlemen.

It also hurts poor countries. Most of the other countries in the world that are natural producers of sugar are much poorer than the United States . So we are discriminating against some of the poorest in an industry that could help countries raise their citizens out of poverty - all while we protect a few and penalize many in the United States.

The fundamental question is why? If it costs money, if it costs jobs, if we're worse off as an economy, why does United States continue to pursue a policy that creates problems for us with the environment, international trade, and the sugar using industry? The answer is politics. The people involved with the sugar growing industry invest a small percentage but a significant amount of dollars of their sugar profits in keeping things just the way they are. Even though sugar represents perhaps 1 percent of the agriculture production, it makes 17 percent of agriculture's political contributions.

And it goes far beyond campaign cash - although don't underestimate that impact - that flows to both parties as well as individual candidates. This sugar "lobby" is a vast array of trade associations on the regional, state, and national level. They employ an army of sophisticated public relations people, trade association executives and lobbyists. I have often thought that if we could mobilize the support that the sugar lobby has to nourish poor children rather than the sugar industry, no kid would ever go to school hungry in this country again.

I've tried in the past to challenge this cozy, costly arrangement with amendments on the House floor and it has been, to say the very least, tough sledding. Public outrage, or at least some public attention, would help get some traction.

As we look at a the wide range of items embedded in the farm bill, and even more at the wide range of things that are not in the Farm Bill, we will need to make some hard tactical decisions about how much energy should be invested in what is always an uphill battle. It's one of the reasons why it's so important to have these conversations, because all of us are going to have to pick our spots. Sugar, whether it's reformed or not, will remain a focal point, a textbook case on how special advantage is gained and maintained and the difficulty in making changes that will benefit the environment, consumers and the world.


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Sugar is cheap. But apparently not cheap enough for you.

Do you really think that candymakers left the US because of the cost of sugar? That is ridiculous. The cost of labor and health care, more likely.

In truth, the sugar making industry provides many good jobs that would be lost without the protections that you attack. The farmers and factory workers would be devestated if you were to make them compete with the slave labor that many foriegn countries use to harvest sugar cane. And the environmental damage that you seem so concerned about will just happen elsewhere in the world. Actually, our sugar protections are good for the environment because at least we can regulate the industry in this country.

BTW, it's "beet" not "beat".

A little disclaimer. I am from Minnesota where beet sugar is an important crop. I would encourage you to read this page and get a look at the people that would be affected by your proposals.

http://www.smbsc.com/pdfs/SMBSCSugarIndustry.pdf

From your Farm Bill of Rights, you said,

"American children have a right to good nutrition: Children who are hungry perform poorly in school and are at greater risk for long-term health problems. We deserve a food and farm policy that makes sure our children are well nourished by allowing more healthful choices and opening up access to fruits and vegetables."

And yet you want to get rid of the sugar program so we can have cheaper candy for children?? How does this make any sense whatsoever? Maybe now that the candy companies have moved to Mexico (and next China) they can discount their goods more instead of blaming the sugar program.

Developing countries prefer receiving a fairer price for their sugar as we have under the current program. Deregulate it completely as you are suggesting, to open up to all trade, and BRazil, with its slave labor, will be the dominant force, thereby further devastating small, developing countries unable to compete.

I don't think you can expect to take on a single agricultural protection policy and make any progress. One reason the government protects sugar is that they also subsidize the overproduction of corn. I agree with your overall aim, but to me it seems a little unfair to attack one industry while ignoring their competitors.

The overproduction of corn is NOT caused by our subsidies! With such an inelastic commodity, overproduction is what usually occurs in agriculture, with or without subsidies. Look at coffee beans, which the developed nations don't grow or subsidize. But there is a still a worldwide glut of coffee beans on the market that have driven prices to Depression-level eras and devastated many countries (Central America and Mexico in particular) To control overproduction, the New Deal instituted price stability through a price floor and reserves. During the 60s, with the spectre of "Castroism" looming over Latin America, we helped institute the International Coffee Exchange to control global prices on coffee. This was of course destroyed by Reagan in the 1980s, to let the "free market" reign.

I truly wish Oxfam, the One Campaign and other well-meaning development advocates would quit with the propaganda that subsidies cause overproduction and are the cause of dumping devastating third world countries. Farmers here and abroad want fair prices for their commodities and no dumping. Subsidies are symptoms of the crisis, not the cause, for both farmers here and abroad.

Is there any special reason why surplus beet sugar or for that matter cane sugar cannot be diverted into alcohol production?  After all, it's the sugar which ferments.  I'd rather see more cars bars than mars bars. 

aMike

Tobacco and sugar lobbies drive most of our hemisphere's foreign policy since the days of Cuban independence...

Oil imports are capped too, so as to set an artificial price inflation lever in place. Nobody complains about expensive gas though. (/rolls eyes)

You can use sugar to make ethanol, we should plant more sugar-producing crops, and encourage other countries to do likewise so that we can help put a real dent in our oil dependency problem. Tending crops counts as honest work, get your obese teenager's fat butt off that couch and confiscate the remote and send him off to work the fields for the summer. Builds character.

Substituting one burning fuel with another doesn't do anything for the growing global warming problem. I don't call that progress by any standard.

The Congressman talked instead about providing incentives for farmers and ranchers to be clean energy producers - to help them make the capital investment - rather than subsidizing ethanol and sugar. That I would call progress.

Farmers and ranchers are among the Americans most threatened by global warming as well.

I don't drink the "ethanol will solve all our problems" moonshine-flavored kool-ade either, but there is a pretty major difference between a *good* ethanol/biodiesel fuel program and burning petrol fuels. In ideal circumstances, the carbon you release in burning is carbon that was previously sequestered from the atmosphere by the plant, so in a perfect world it's carbon-neutral. In the real world, you can spend way more energy on fertilization, harvesting, and fermentation than you ever get back out of it, so you end up spewing just as much carbon. That happens in corn-based ethanol, but Brazil's cane-based ethanol program is actually very efficient and is a substantial gain in carbon emissions over petrol fuels.

(And I'm unable to write a post that mentions biofuels without pimping the promise of algal-based biodiesel, which I think may be a biofuel which could actually replace a substantial amount of our oil usage. There, done.)

More than just protecting the U.S. cane and beet sugar producers, aren't our sugar protections also about protecting corn, which is used to make sugar in the form of high fructose corn syrup?

"You say I'm a dreamer.  We're two of a kind.  Looking for some perfect world that we both know that we'll never find." - Thompson Twins, "Hold Me Now"

Ethanol is terrible for water conservation, it takes more energy to make it than it produces.

Poor conversion and conservation quality.

Now it could be applied as a way for farms to develop their own fuel strains, as a way of insuring self sufficient farms in the coming peak fuel era, but this is a narrow focus, albeit necessary.

Allow cooperative or small development refineries to be made that can develop into fuel mixture stations, to the point a good percentage of the gas tank content is bio-generated.

This would be done on or near your own land, so land conservation and pollution control tax dividends would apply, and some federal regulation. Crops specific to regions could be featured as part of the ethanol blend. Thus mid-level producers and marketers in regions can exert some leverage on the fuel market, enough for small business to be more competitive as a help to farmers and expansion of tech for industries, but not as a chief derivative. Additionally it would help address market prices for staple crops by raising value moderately as the volume on market levels when put to fuel use.

Expanding fuel efficiency to 60 mpg standards(available since the 1960s) could solve much of the consumer model issues we face. Coupled with a tax, since demand is addressed first, to be put into the road and fuel infrastructure.

The value added tax would let us stay ahead of fuel needs by giving a fund to help develop efficiency in the realm of applied science. It could help promote business in terms of accelerated tax savings, for switching over to better fuel economy models.

One of the richest folks back in the Red River Valley is a sugar beet "farmer" who has never farmed a day. He leases some land and then gets paid a sugar subsidy not to farm it. Then he sits around on his fat ass and complains about folks on welfare -- from a man paid hundreds of thousands a year for signing two little contracts. He receives the highest subsidy and is the biggest corporate welfare recipient in his county....and he wants to eliminate food stamps, medicare and medicaid and all those other welfare programs. His wife's allowance is $10,000 a month and as nice as she is, there is something so immoral about this that whenever I hear about the sugar subsidy I want to spit.

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