Letter on Alexis Taylor’s Nomination to Under Secretary for Trade and Foreign Agricultural Affairs

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The American Sugar Alliance (ASA) sent a letter to U.S. Senate leadership expressing deep support for the nomination of Alexis Taylor to serve as the U.S. Department of Agriculture’s (USDA) Under Secretary for Trade and Foreign Agricultural Affairs. ASA urges the U.S. Senate to swiftly consider and confirm Director Taylor. In our current uncertain global climate, having an Under Secretary for Trade and Foreign Agricultural Affairs as qualified and knowledgeable as Taylor will be invaluable to all of American agriculture.

 

Read the full letter here.

American Sugar Alliance Testifies on Importance of Farmers, Farm Bill

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Dr. Rob Johansson, Director of Economics and Policy Analysis at the American Sugar Alliance (ASA), testified before the House Committee on Agriculture today on the importance of supporting America’s sugar farmers, producers, and sugar supply chain by maintaining a strong U.S. sugar policy in the 2023 Farm Bill.

In his written testimony, Johansson outlined the strategic importance of American sugar production. The U.S. sugar industry generates more than 140,000 jobs and $20 billion in annual economic activity. In short, the U.S. sugar industry serves as the backbone of local economies in both rural and urban regions while keeping America supplied with an essential ingredient.

Over the past two years, Johansson pointed out, problems with global supply chains have made clear the danger of relying on uncertain foreign suppliers. “This is why an effective sugar policy, which maintains a strong domestic industry, is essential to the food security of our nation,” Johansson said.

Johansson thanked lawmakers for their bipartisan support of U.S. sugar policy, which, because it is based on loans repaid with interest, is designed to cost taxpayers nothing. This structure ensures U.S. sugar policy serves American farmers, consumers, food manufacturers, and taxpayers alike.

However, much like other agricultural sectors, sugar producers are feeling the pressure of rising production costs and inflation while loan rates for raw cane sugar and refined beet sugar have not kept pace. Johansson urged lawmakers to examine how the farm safety net could be updated to better reflect actual costs.

“Operating margins are being squeezed each year, due to rising labor, fuel, seed, fertilizer, equipment and interest rate costs that hit our producers in the field and at the factories they own. Having a loan rate that is closer to actual costs of production would provide a more effective safety net to our producers,” Johansson said.

Other farm safety net programs, such as crop insurance, are important for America’s sugar farmers, and could be improved upon to better meet the unique risk management needs of sugar crops.

Johansson also explained how farm and trade policies, and the strong enforcement measures put into place to uphold these policies, prevent our market from being flooded by heavily subsidized foreign sugar imported from the volatile world market. This sugar is normally sold well below the cost of production and is not produced under the same high standards as U.S.-made sugar.

“Our industry proudly meets some of the highest labor and environmental standards in the world, unlike many other large sugar producing countries. Moreover, using best practices and continuous improvement, our sector has made huge strides in sustainability,” Johansson said.

Johansson concluded his testimony by inviting lawmakers to visit sugar farms and processors throughout the country to see first-hand how U.S. sugar policy and the Farm Bill support America’s sugar farming families and workers, and the communities where they live and work.

U.S. Sugar Producers Propose WTO Reforms to Improve Transparency, Accountability

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The World Trade Organization (WTO) announced earlier this week that trade ministers and negotiators from around the globe will convene the week of June 13 for its 12th Ministerial Conference. In support of these important negotiating efforts, the American Sugar Alliance (ASA) released a new policy statement outlining four recommendations to improve the international trade body’s effectiveness. 

WTO reforms will make dismantling unfair trade practices and subsidies an attainable goal, ASA noted, laying the foundation for a less distorted and more predictable global market.   

A recent WTO dispute case finding the use of subsidies by mega sugar producer and exporter India to be inconsistent with its WTO commitments has served to starkly underscore the urgent need for reform. Despite the WTO’s findings that India vastly exceeded the allowable level of subsidies for its sugarcane producers and also employed WTO-illegal export subsidies, India has vowed to maintain its market-distorting policies as it pursues the WTO appeal process.   

This is a glaring example of the current dysfunction at the WTO that has hindered real reform in the global sugar market. With the Biden Administration’s stated goal of “enforcing global agricultural trade rules” in defense of America’s farmers and food manufacturers, ASA believes now is the time to act. ASA proposes the following reforms:   

  • Accountability. Impose more rigorous disciplines on the practice of members’ self-designation of “developing country” status and the accompanying application of “special and differential” treatment. 
  • Modernization. Update the methodology by which countries measure levels of government support. The current methodology is based on commodity prices during an arbitrary three-year period in the 1980s.  
  • Transparency. Improve the transparency, timeliness, and, importantly, the accuracy of country notifications relating to domestic support and export subsidies.  
  • Enforcement. Overhaul the dispute settlement mechanism to ensure that, if necessary, a member’s noncompliance with established obligations can be addressed in a timely manner. 

 “Sugar markets are widely considered to be the most distorted and volatile commodity markets in the world, with billions in foreign subsidies encouraging over production by inefficient producers,” said Dr. Rob Johansson, ASA’s Director of Economics and Policy Analysis. “Unlike other countries, U.S. sugar farmers and workers produce a reliable supply of sugar under some of the world’s highest safety, labor, and environmental standards and at zero cost to taxpayers.”  

“Implementing common-sense reforms can create a WTO that reflects 21st century realities,” said Luther Markwart, ASA’s chairman. “Our industry has long advocated for the verified elimination of all global sugar subsidies and a modernized WTO will place us one step closer to achieving that goal.” 

These reform proposals are also in alignment with the bipartisan Zero-for-Zero approach to eliminating foreign sugar subsidies, which was introduced in Congress last year and is supported by America’s sugar producers. 

Statement on the Passing of Congressman Jim Hagedorn

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Statement from the American Sugar Alliance on the passing of Congressman Jim Hagedorn:

“We are saddened by the loss of Congressman Jim Hagedorn. He cared deeply about Minnesota and America. As part of a multi-generational farm family, Congressman Hagedorn knew intimately the challenges faced by America’s farmers. From his position on the House Agriculture Committee, Congressman Hagedorn advocated for Minnesota’s sugarbeet farmers and was a friend to the entire sugar industry. We send our condolences to Congressman Hagedorn’s wife, Jennifer, his loved ones, and his constituents.”

WTO Dispute Panel Rules India’s Sugar Subsidies Out-of-Bounds

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WASHINGTON – India’s sugar subsidy regime violates its obligations under a multilateral World Trade Organization agreement, according to the international trade body.

A WTO dispute panel initiated by Australia, Brazil and Guatemala in early 2019 investigated India’s massive sugar subsidy regime and found it was not compatible with New Delhi’s WTO commitments. The panel released its findings in a December 14 report.

India is one of the largest sugar producers in the world, producing more than 30 million tons of milled sugar in most years with the support of government production subsidies. India has also used export subsidies in recent years to help dump 6 to 7 million metric tons of sugar onto an already distorted and depressed world market, helping to drive world prices below the global cost of production.

The panel found that India’s provision of domestic support to its sugarcane producers vastly exceeds the level permitted under the terms of relevant provisions of the Agreement on Agriculture. The panel also found that New Delhi’s prolific use of export subsidies violates relevant provisions of both the Agreement on Agriculture and the Agreement on Subsidies and Countervailing Measures.

“India has not been playing by the rules for years to the detriment of other sugar producers,” said Dr. Rob Johansson, Director of Economics and Policy Analysis at the American Sugar Alliance (ASA). “This case focused on domestic sugar and export subsidies provided by India since 2014 and illustrates how much time these actions currently require to play out. We can now anticipate that India will use every procedural tool at its disposal in Geneva to drag the case out even longer.”

The world sugar market is widely considered to be the most distorted and volatile commodity market in the world, with billions in foreign subsidies encouraging over production. That surplus gets dumped on global markets – depressing prices. Unlike other countries, U.S. sugar farmers and workers produce a reliable supply of sugar under some of the world’s highest safety, labor and environmental standards and at zero cost to taxpayers.

“Our industry has long advocated for the verified elimination of all global sugar subsidies,” said Luther Markwart, Chairman of the ASA. “The panel’s finding in the India case serves as a stark reminder of just how far we have to go in achieving that objective.”

Univ. of Tennessee Study Rejects Candy Lobby’s Long-Held Accusations

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WASHINGTON – Researchers from the University of Tennessee released a study today that sheds new light on how sugar prices affect sweetened product prices, and their findings stand in sharp contrast to decades-old claims made by candy company lobbyists.

Drs. Karen DeLong and Carlos Trejo-Pech, of the university’s Department of Agricultural and Resource Economics, found that the retail cost of sweetened products, such as candy and baked goods, is not affected by the price that the food manufacturers pay for sugar. In fact, the researchers noted that sugar generally accounts for less than 2.6 percent of sweetened product prices.

“Sugar prices do not impact how food companies price their sweetened products in any statistically significant way, which ultimately reaffirms the fact that U.S. sugar policy does not harm sugar-using firms,” the authors concluded.

U.S. sugar policy involves loans that are repaid with interest instead of subsidy checks, which enable producers to store large amounts of sugar that can be delivered to customers when needed. The system operates without taxpayer cost.

“This study shows that there is little-to-no correlation between changes in sugar prices and the prices that grocery shoppers ultimately pay for sweet treats,” explained Rob Johansson, director of economics and policy analysis for the American Sugar Alliance, which commissioned the work.

“In other words, gutting U.S. sugar policy and outsourcing America’s sugar supply to subsidized companies abroad won’t yield positive results for U.S. consumers or food makers,” said Johansson, who previously served as chief economist for the U.S. Department of Agriculture. “It will only harm American farmers and workers.”

This study is the second conducted by the University of Tennessee about U.S. sugar policy and prices. The first, an independent peer-reviewed piece that was published June 2020 in Agricultural and Food Economics, found that U.S. sugar prices did not harm the financial performance of food manufacturers.

Drs. Karen DeLong and Carlos Trejo-Pech are scheduled to present their findings at the 2022 Southern Agricultural Economics Association meeting.

Dr. Robert Johansson Takes on Director Role at American Sugar Alliance

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Dr. Robert Johansson will help guide America’s sugar industry in his new role as the Director of Economics and Policy Analysis at the American Sugar Alliance (ASA), effective today. Johansson will provide domestic and international sugar market analysis and evaluate the farm and trade policies that affect U.S. sugar producers.

Johansson joined ASA in January 2021 as the Associate Director of Economics and Policy Analysis. Prior to joining ASA, Johansson was most recently Chief Economist at the U.S. Department of Agriculture (USDA), where he advised the Secretary of Agriculture, directed the analysis of commodities, and managed the designs of various USDA programs.

“Rob has quickly become an invaluable member of our team. He hit the ground running, leading efforts to reaffirm the importance of sugar’s strong domestic supply chain and document foreign sugar subsidies,” said Luther Markwart, ASA’s chairman. “As the Director of Economics and Policy Analysis, we know that Rob will continue his excellent work on behalf of America’s sugar producers.”

“America’s sugar growers and workers have welcomed me with open arms, and it is an honor to serve them in this new role,” Johansson said. “I look forward to working across the industry to continue advancing more sustainable and efficient sugar production and address any challenges that threaten the long-term survival of domestic sugarcane and sugarbeet production.”

Johansson succeeds veteran sugar economist Jack Roney. Roney retired on August 31, 2021, after 25 years with ASA.

Statement on the passing of former Congressman Paul Mitchell

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Statement from the American Sugar Alliance on the passing of former Congressman Paul Mitchell:

Michigan’s sugarbeet producers and the rest of the U.S. beet and cane industry had a steadfast friend in former Congressman Paul Mitchell. During his time in Congress, he served America’s farmers with integrity and championed smart farm policies. We send our condolences to his loved ones as they mourn this incredible loss.

Sugar Producers Support New Legislation to Zero Out Harmful Foreign Sugar Subsidies

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The American Sugar Alliance (ASA) supports new legislation introduced today by Congresswoman Kat Cammack (R-Fla.) and Congressman Dan Kildee (D-Mich.) which seeks to zero out the foreign subsidies that make sugar the world’s most distorted commodity market. This legislation levels the playing field and preserves family farms and good-paying jobs, while maintaining a strong and stable domestic supply chain for sugar.

This bill takes a Zero-for-Zero approach to sugar subsidies: only when all foreign countries eliminate their subsidies will the United States give up its existing no-cost sugar policy.

America’s sugar policy offers producers loans that are repaid with interest – not subsidy checks. It’s designed to cost taxpayers nothing.

Despite being among the most efficient and sustainable sugar producers in the world, America’s sugar growers cannot compete against billions of dollars in foreign subsidies. These subsidies drive down world prices for sugar on the global dump market to well below the world average cost of production.

“Time and again, the survival of American sugar producers is threatened by the unfair practices and dumping of cheap sugar by foreign countries. We have to protect our own supply and support the hardworking American sugar producers that bolster our rural communities,” said Cammack. “Free trade must also be fair trade, and we cannot abandon our own production capabilities in favor of cheap imports that destroy livelihoods and our markets. I’m proud to introduce this resolution that will ensure a level playing field and preserve family operations.”

“This bill calls foul on foreign sugar subsidies, finally giving American sugar farmers the opportunity to compete on a level playing field,” said Ardis Hammock, a sugarcane grower on a third-generation family farm in Florida. “Unilaterally eliminating America’s successful sugar policy could put our farms, our jobs, and our nation’s sugar supply at risk.”

“My farm has been in my family for 126 years, and we can only survive to farm for another 126 years if given a fair chance. Representatives Cammack, Kildee and Fischbach recognize the critical threat that foreign sugar subsidies pose to America’s sugar producers, and we appreciate their leadership in introducing this common-sense legislation,” said Daniel Younggren, a sugarbeet grower in Minnesota and President of the American Sugarbeet Growers Association.

The Zero-for-Zero legislation specifically highlights Brazil, India, Thailand, the European Union, Russia, and Mexico for their egregious abuse of sugar subsidies. ASA has extensively catalogued the use of subsidies in these nations, most recently finding that Russia spent $392 million a year in direct and indirect subsidies to bolster its inefficient sugar industry. Unfortunately, this is a common occurrence on the global scale.

Original co-sponsors of Zero-for-Zero include Reps. Michelle Fischbach (R-Minn.), Jim Hagedorn (R-Minn.), Austin Scott (R-Ga.), Rodney Davis (R-Ill.), Clay Higgins (R-La.), Liz Cheney (R-Wyo.), Julia Letlow (R-La.), Garrett Graves (R-La.), and Kurt Schrader (D-Ore.).

Statement on Senate Passage of the Growing Climate Solutions Act

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Statement from the American Sugar Alliance on Senate passage of the bipartisan Growing Climate Solutions Act:

“Today’s overwhelmingly bipartisan Senate vote for the Growing Climate Solutions Act is a testament to the hard work of Senate Agriculture Committee Chairwoman Debbie Stabenow (D-Mich.), Ranking Member John Boozman (R-Ark.), and Sen. Mike Braun (R-Ind.). As members of the Food and Agriculture Climate Alliance and dedicated stewards of the land, America’s sugar producers will continue to advocate for voluntary climate-smart policies that allow our farmers to achieve our climate goals.”

New Report Highlights Resiliency of America’s Sugar Supply Chain

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America’s sugar supply chain proved resilient in the face of immense challenges in 2019 and 2020, in large part due to the stability provided by U.S. farm and trade policies, the American Sugar Alliance (ASA) stated in a report submitted to the U.S. Department of Agriculture (USDA).

This report was developed by industry economists Jack Roney and Dr. Rob Johansson and provides an in-depth analysis of how the domestic sugar industry successfully responded to rapid shifts in consumer demand due to the COVID-19 global pandemic while dealing with the impact of a disastrous harvest. As Americans were sheltering in place during the pandemic, dining at restaurants and other commercial food outlets decreased sharply as Americans turned to dining at home.  This increase in home cooked meals translated to increased grocery store sales of sugar. The U.S. sugar industry responded to this dramatic change in the distribution supply chain to keep Americans well supplied. Moreover, no manufacturer was forced to close operations due to lack of sugar supplies.

That is because America benefits from a robust domestic sugar industry that supports 142,000 jobs in 22 states and produces high-quality sugar at an affordable price. More than 90 percent of the sugar consumed in the United States is either grown on 11,000 family farms or refined from raw sugar by American cane sugar refiners.

There are several factors that have contributed to the success of the domestic sugar supply chain:

  • The sugar industry is geographically diverse. Approximately half of America’s sugar production comes from sugarbeets, grown in 11 states, and sugarcane, grown in three states. These crops are processed in 45 mills, factories, and refineries across the country and sugar is distributed from 91 locations strategically located throughout the United States
  • The sugar industry is vertically integrated. The domestic sugar industry is largely structured as farmer-owned cooperatives. These cooperatives have made investments to respond efficiently to supply and demand challenges. The cooperative structure also allows producers to earn more of the food production dollar, supporting our vital rural communities.
  • The sugar industry is sustainable. Over the past 20 years, America’s sugar farmers have produced 16 percent more sugar on 11 percent less land while operating under some of the world’s highest environmental and labor standards.
  • The sugar industry is supported by successful farm and trade policies. America’s sugar policy ensures that we have the flexibility to respond to challenges and maintain a secure supply of sugar. All at no cost to taxpayers.

“Sugar is a critical good, and we are proud of the way that America’s sugar farmers and workers have always stepped up to keep America supplied with this sweet ingredient,” said Jack Pettus, ASA’s chairman. “A strong domestic sugar industry plays a key role in our national food security and contributes to the economic well-being of our rural and urban communities. It’s critical that the United States maintain the strength and integrity of the successful farm and trade policies that underpin a viable and resilient sugar supply chain.”

Please click here to review the full report provided to the USDA.

New Study Pulls Back the Curtain on Russian Sugar Industry Transformation

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Russia’s sugar industry has made an unparalleled and unexpected transformation from one of the world’s biggest sugar importers, relying on foreign sugar for up to 80 percent of its needs as recently as 2003, to a net exporter of sugar. Little has been documented about Russia’s rapid rise until today, when the American Sugar Alliance (ASA) released a report, “Russia’s Sugar Industry: Transformation with Government Intervention,” authored by sugar experts from the region.

The report, authored by Patrick H. Chatenay and Sergey Gudoshnikov, not only details how Russia engineered this sudden shift in sugar production, but why the government sought to regenerate its domestic sugar industry. Chatenay, based in the United Kingdom, is a renowned expert on the global sugar market and Gudoshnikov, a Russia native, was Senior Economist for the International Sugar Organization in London for 31 years.

Since its inception, the Russian Federation has placed a high priority on domestic food security. Reducing Russia’s dependence on foreign sugar took on increased urgency as long-time supplier Cuba’s sugar market collapsed. Russia was forced to rely on the uncertain, unreliable and volatile global sugar market, which is widely considered to be the most distorted commodity market in the world as rampant global subsidization has led to overproduction and predatory pricing.

That pricing drove Russia to control and limit subsidized imports and utilize direct and indirect subsidies to bolster its own inefficient sugar industry. The report released today by ASA found that over the past decade, the Russian government utilized a number of tactics to regenerate domestic production, including:

  • Imposing variable import duties on raw sugar and a fixed import duty on white sugar
  • Subsidizing operating costs, including subsidies for fertilizers and herbicides
  • Subsidizing interest rates for investments in sugarbeet processing and storage

“In total between 2010 and 2017, the government injected an estimated $772 million of public funds into the industry to support a doubling of sugarbeet-processing capacity and beet sugar output,” the report states. The authors estimate the average annual value to the Russian sugarbeet industry of government import protections and direct subsidies during this period at $392 million per year.

By all accounts, Russia’s plan worked. Russia produced a surplus of sugar in excess of 1.6 million tons in 2020, prompting the government to take steps to support and facilitate sugar exports in order to offload its surplus onto the world market.

“This report sheds much needed light on the measures Russia has taken to spur domestic sugar production,” said Dr. Robert Johansson, ASA’s Associate Director of Economics and Policy Analysis and former Chief Economist at the U.S. Department of Agriculture. “Russia’s newfound role as a potential sugar exporter requires close monitoring, as its decisions moving forward will now carry additional ramifications for the over-subsidized global dump market for sugar. We take seriously the authors closing observation on the certainty of continued Russian involvement with the sugarbeet industry.”

“The world sugar market is riddled with direct and indirect subsidies,” added ASA’s Director of Economics and Policy Analysis, Jack Roney, “and little is known about the distorting government interventions in many countries’ sugar sectors. This study on Russia follows on the authoritative studies the ASA has commissioned in recent years, and shared with the U.S. Department of Agriculture and U.S. Trade Representative, on the sugar industries of Brazil, India, Thailand, and the European Union.” The Russia study, and past country studies, are available at the ASA website.

ASA shared this report in a letter to U.S. trade officials and asked for continued diligence in monitoring Russian intervention moving forward.

Statement on the Confirmation of Dr. Jewel Bronaugh

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Statement from the American Sugar Alliance on the confirmation of Dr. Jewel Bronaugh as Deputy Secretary of the U.S. Department of Agriculture (USDA):

“America’s sugar farmers and workers congratulate Dr. Jewel Bronaugh on her confirmation as Deputy Secretary of Agriculture. Dr. Bronaugh brings a wealth of expertise in promoting American agriculture to USDA as well as a tireless commitment to supporting farmers and ranchers. We look forward to partnering with Dr. Bronaugh to support smart farm and trade policies, maintain a sustainable food supply and continue our investments in strong rural communities. Importantly, we are confident that Dr. Bronaugh’s leadership at the USDA on these issues and more will be pivotal in continuing to move agriculture forward.”

Statement on the nomination of Robert Bonnie

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Statement from the American Sugar Alliance on the nomination of Robert Bonnie as Under Secretary for Farm Production and Conservation (FPAC) at the U.S. Department of Agriculture (USDA):

“U.S. sugar farmers and workers rely on the Farm Bill programs administered by USDA’s FPAC mission area to continue producing safe, reliable, and quality supplies of American sugar. Robert Bonnie knows how important commodity loans, crop insurance, and conservation practice cost-share are to U.S. farmers.  And he also knows from his previous tenure as Under Secretary how important the career staff are at USDA who implement the Farm Bill.  Those programs have allowed American sugarcane and sugarbeet farmers to sustainably produce 16% more sugar on 11% less land over the past 20 years while using fewer inputs.  We support Mr. Bonnie’s nomination and look forward to continuing to work with him and his staff to find commonsense solutions to today’s issues while supporting our famers and processors.”

Statement on the Growing Climate Solutions Act

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Statement from the American Sugar Alliance in support of the reintroduction of the bipartisan Growing Climate Solutions Act:

“America’s sugar farmers are dedicated to advancing climate-smart policies and support efforts to dismantle technical barriers that impede the ability for farmers to voluntarily participate in carbon markets. The bipartisan Growing Climate Solutions Act is an important step forward and the American Sugar Alliance applauds its reintroduction. We appreciate Senate Agriculture Committee Chairwoman Debbie Stabenow (D-Mich.) and Sen. Mike Braun (R-Ind.) for their work with Sen. John Boozman (R-Ark.) to improve this legislation and ensure it helps rural America further achieve its climate goals.

“A number of farmer-friendly changes have been added to the Growing Climate Solutions Act to achieve funding needs without reopening the Farm Bill or otherwise affecting the existing funding of farm and conservation programs. Importantly, this legislation has already garnered support from a bipartisan group of senators who represent a broad cross-section of American agriculture.”

Statement on the Confirmation of Katherine Tai

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Statement from the American Sugar Alliance on the confirmation of Ambassador Katherine Tai as the U.S. Trade Representative:

“America’s sugar farmers and workers congratulate Ambassador Tai on her confirmation as the U.S. Trade Representative. We look forward to partnering with Ambassador Tai to advance our shared goals of worker-centered trade policies that acknowledge the importance of good-paying American jobs and the need for fair trade rules reflective of global trading realities. We encourage Ambassador Tai and her talented team at USTR to strive to create a rational global sugar market, one devoid of today’s widespread production- and trade-distorting foreign subsidies.”

Statement on Confirmation of Secretary Tom Vilsack as Secretary of Agriculture

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Statement from the American Sugar Alliance on the confirmation of Secretary Tom Vilsack as the Secretary of Agriculture:

“America’s sugar farmers and workers extend their heartfelt congratulations to Secretary Tom Vilsack on his confirmation as the Secretary of Agriculture. Secretary Vilsack’s support for smart farm and trade policies will allow sugar producers to continue investing in sustainable farm practices, efficient sugar production and strong communities, while keeping America supplied with an essential ingredient. America’s no-cost sugar policy is integral to this success story and we look forward to partnering with Secretary Vilsack and his team at the U.S. Department of Agriculture to continue building a brighter future for American agriculture.”

Statement on House Agriculture Committee Leadership Elections

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“America’s sugar farmers and workers extend their congratulations to Congressman David Scott for his election as Chairman of the House Agriculture Committee and Congressman Glenn “G.T.” Thompson for his election as the Ranking Member. We are confident that under their leadership, the House Agriculture Committee will continue its record of supporting America’s sugar producers and our no-cost sugar policy. We look forward to working closely alongside incoming Chairman Scott and Ranking Member Thompson during the 117th Congress.” – American Sugar Alliance

Former USDA Chief Economist to Join American Sugar Alliance in 2021

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WASHINGTON – Dr. Robert Johansson will bring more than 20 years of experience to the American Sugar Alliance (ASA) when he joins the association on January 31 as the Associate Director of Economics and Policy Analysis, ASA announced today. Johansson was most recently Chief Economist at the U.S. Department of Agriculture (USDA), where he advised the Secretary of Agriculture, directed the analysis of commodities, and managed the designs of various USDA programs.

Johansson will work alongside ASA’s Director of Economics and Policy Analysis, Jack Roney, to provide domestic and international sugar market analysis and evaluate the farm and trade policies that affect U.S. sugar producers. Roney, who has worked with the industry for more than 30 years, plans to retire in August 2021, at which time Johansson will assume the Director role.

Prior to his selection as Chief Economist at USDA in 2015, Johansson served as the Deputy Chief Economist at USDA. Johansson has also worked in other senior-level roles at USDA as well as positions at the Congressional Budget Office and Office of Management and Budget. Johansson received his Ph.D. in agricultural and applied economics from the University of Minnesota.

“We are thrilled to welcome Rob to the American Sugar Alliance,” said Jack Pettus, ASA’s chairman. “America’s sugar producers are an essential part of our country’s food supply chain, and there are a growing number of complex issues that affect the continued success of the industry. Rob brings a wealth of experience at the highest levels of government that will help us adeptly navigate current and future challenges.”

“I am honored to continue to serve U.S. agriculture by working on behalf of America’s sugar growers and workers,” Johansson said. “Strengthening U.S. sugar policies and eliminating global sugar subsidies are critical to ensuring a level-playing field for U.S. sugarcane and sugarbeet growers and the workers that process America’s sugar.”

 

Statement on Nomination of Katherine Tai for U.S. Trade Representative

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“The American Sugar Alliance welcomes President-elect Biden’s nomination of Katherine Tai to be the next U.S. Trade Representative. Ms. Tai has an impeccable reputation as a tough and effective negotiator, with a proven track record of advancing U.S. trade interests and countering unfair trade practices. With the global sugar market more distorted and dysfunctional than ever, we look forward to working closely with USTR-designate Tai to protect America’s no-cost sugar policy and ensure that America’s sugar farmers and workers can continue producing a sustainable and affordable supply of sugar.” – American Sugar Alliance

 

Statement on Nomination of Secretary Tom Vilsack

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“During Tom Vilsack’s previous tenure as Secretary of Agriculture, he was a trusted partner to America’s sugar farmers and workers and strengthened the farm and trade policies that support rural America. We look forward to once again working with Secretary Vilsack at the helm of the Department of Agriculture. Together, we will protect America’s no-cost sugar policy and ensure that America’s sugar farmers can continue producing a sustainable and affordable supply of sugar.” – American Sugar Alliance

Statement on Congressman Collin Peterson

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“For thirty years, Congressman Collin Peterson has been a stalwart advocate for American agriculture. Thanks to his leadership at the helm of the House Committee on Agriculture, America’s farmers and ranchers have benefitted from smart farm policies that ensure our food supply remains abundant. Congressman Peterson’s extensive knowledge of the unique nature of the sugar industry and support of America’s no-cost sugar policy have been integral to the success of our farmers. On behalf of America’s sugar growers and workers, we are grateful to Congressman Peterson for his service and wish him the best for the future.” – American Sugar Alliance

New Report Finds No Evidence that U.S. Sugar Program Harms Profitability of Sugar-Using Companies

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A collaborative analysis conducted by four agricultural economics professors at the University of Tennessee and Oklahoma State University has found that U.S. sugar prices do not impede the financial performance of sugar-using firms.

The analysis thoroughly examined, and rejected, the claim from sugar-using firms “that as the U.S. price of sugar increases relative to the world sugar price, this negatively impacts their profits.” As the authors note, their findings “suggest that U.S. sugar-using firms pass on higher costs to consumers when relative prices increase or do not pass on discounts to consumers when relative sugar prices decrease.”

This was on full display in the aftermath of the dumping of subsidized Mexican sugar on the U.S. market in 2013. Sugar prices plummeted, costing U.S. producers $4 billion and many sugar workers their jobs. Meanwhile, Americans paid higher prices at the grocery store for sweetened products and manufacturers pocketed the profits.

This report expands upon a well-known 2016 report published by Dr. Alexander Triantis, during his tenure as dean of the University of Maryland business school, and analyzes the financial performance of 26 publicly traded companies that use sugar primarily purchased in the United States. In his 2016 report, Dr. Triantis found that under current U.S. sugar policy, the nine largest publicly traded firms producing sugar-containing products had added jobs, increased production, and far outpaced the rest of the food processing industry in profit returns.

The full report prepared by the University of Tennessee and Oklahoma State University agricultural economists can be found here. This is an independent and peer-reviewed report for which no industry funding was received and which was originally published by Agricultural and Food Economics.

Dr. Karen L. DeLong, one of the report’s authors and an Assistant Professor of Agricultural and Resource Economics at the University of Tennessee, said that the analysis yielded conclusive results.

“The U.S. sugar program buffers domestic sugar producers against heavily subsidized foreign sugar, but sugar-using firms claim that this program maintains artificially high domestic prices and therefore decreases profits. The data show that when all other conditions remain the same, there is no evidence to support these claims,” DeLong said.

In fact, the analysis found the unexpected result that “as U.S. prices increase relative to world prices, sugar-using firms are more profitable.”

“America’s sugar farmers and workers are proud to provide our customers with more than 60 different types of affordable and sustainably produced American sugar,” said Jack Pettus, chairman of the American Sugar Alliance. “This analysis confirms what our industry has long known: the price stability provided by America’s no-cost sugar policy has no negative effect on the bottom line of sugar-using companies.”

Pettus continued, “The pandemic has highlighted the importance of essential products like sugar to be produced in the U.S. and delivered through reliable supply chains. America’s sugar farmers and workers need a strong no-cost sugar policy to give us a fighting chance against excess foreign imports that threaten our ability to produce sugar domestically.”

New Survey: Americans Get Great Deal on Sugar, Support Sugar Farmers

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Sugar farmers from across the country are headed to Capitol Hill today to defend America’s no-cost sugar policy, armed with brand-new data finding consumers believe American-made sugar to be affordable.

Although consumers in other developed countries pay about the same as U.S. shoppers for sugar, critics of U.S. sugar policy continue to perpetuate the myth that supporting American farmers makes sugar too expensive, but their flawed messaging does not resonate with consumers. According to a new survey of consumers, 63 percent of Americans believe sugar is not expensive at all or the right price – fewer than two in 10 consumers believe that sugar is priced too high.

In fact, the survey found that the average consumer believes that sugar producers receive one dollar for every pound of sugar they produce. In reality, that number is significantly lower, with wholesale prices averaging 36 cents for a pound of refined sugar in 2019. Sugar farmers only receive approximately half of that 36 cents, from which they must deduct substantial expenses for producing the crop.

“America’s farmers are proud to grow the sugar crops that help feed our nation,” said Dan Younggren, a sugarbeet farmer from Hallock, Minnesota and president of the American Sugarbeet Growers Association. “U.S. sugar policy is a win for taxpayers, too, as it’s designed to cost nothing. After last year’s disastrous crop, it’s not easy leaving the farm as we are busy preparing for spring planting, but it’s important that we take this message directly to Congress.”

In addition, a majority of Americans are stunned to learn that sugar producers see only a small share of the cost of sugar-sweetened products. Fifty-five percent of those surveyed found it surprising that sugar prices account for just two cents of the cost of a $1 chocolate bar, a favorite American treat.

These data bolster the message farmers are taking to lawmakers this week: America’s no-cost sugar policy ensures that consumers and manufacturers alike have a reliable supply of affordable, high-quality and sustainably produced American-made sugar.

“My family works hard to grow sugarcane, investing long days and incredible expense to supply America with a sweet supply of sugar at a fair price,” said Stephen Simoneaux, a sugarcane farmer from Louisiana, who is participating in congressional meetings this week. “We’ve been farming sugarcane for several generations, and I would like my children to continue this legacy. But if farm policy critics are successful in destroying America’s no-cost sugar policy and opening our markets to a flood of subsidized foreign sugar, our farm will not survive.”

The survey also found that 67 percent of Americans prefer to buy homegrown American sugar and support our farmers, even if that sugar were to cost slightly more than imported sugar. American-made sugar is grown by family famers across the United States, processed by skilled workers and distributed quickly to consumers and manufacturers.

All told, the U.S. sugar industry generates 142,000 jobs across more than 20 states. And because American sugar is produced using some of the most stringent environmental and labor practices, it’s a sustainable alternative to subsidized foreign sugar.

This comprehensive nationwide survey of American consumers was conducted January 29-31. Review full survey results here.

Congressman Vela: Diversity of Ag Committee Benefits Farmers Everywhere

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The chairman of the House subcommittee with jurisdiction over farm commodity programs said yesterday that the unique perspectives and bipartisanship of his panel help it function well for U.S. farmers and ranchers.

“The demographic and geographic diversity inside the House Agriculture Committee make it special,” Congressman Filemon Vela (D-TX) said at yesterday’s International Sweetener Symposium.

Each member has different experiences and priorities to share, which ensures that farm policies work better for the whole agricultural industry, not just a handful of crops, according to Vela, who chairs the House Agriculture Subcommittee on General Farm Commodities and Risk Management. And working with growers of all shapes, sizes, and specialties is a priority for the panel, he said.

“We held our first hearing back in May, and we brought in farmers from all around the country to talk about the general conditions of the farm economy,” he said. “What we learned is that no matter where they came from – we had farmers from California, Texas, Minnesota, Florida and elsewhere – folks are having a very difficult time.”

Some growers are being hit hard by overseas tariffs that have dried up markets, he explained. Others have struggled with weather disasters, are experiencing mounting financial pressures, and have faced losses that traditional risk management tools are not equipped to cover.

Vela said Congress was fortunate to pass the 2018 Farm Bill when it did, because delayed action would have left farmers with fewer tools to weather the storm. That bill included a continuation of America’s no-cost sugar policy, which Vela said is critically important to sugarcane farmers in his district.

“With respect to sugar policy…the approach of leaving well enough alone is the right approach,” he explained. The policy operates without taxpayer cost, and Vela said that he would continue to lead efforts to rebuff any political attacks on sugar farmers in the future.

Similar sentiments about sugar policy were made by lawmakers throughout this week’s meetings, which underscores the thesis of Vela’s speech. Members of the Agriculture Committee are listening to the priorities of their colleagues and are reaching across the aisle to come together on behalf of all farmers, not just those in their districts.

EU Sugar Reform Transferring Billions from Farmers and Taxpayers to Food Processors

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After more than a decade of transition, Europe’s sugar policy reform is finally complete, and it is transferring $2.5 billion a year in wealth from farmers and EU taxpayers to food processors, with no discernible benefit to grocery shoppers.

That’s according to Patrick Chatenay, a European sugar market expert from the United Kingdom who spoke at today’s International Sweetener Symposium.

Some critics of America’s no-cost sugar policy point to the EU as a model for change, but Chatenay warns that there are valuable lessons to be considered from Europe’s experience.

“Domestic and foreign subsidies destroy competitive industries,” he said, “Europe is still wrestling with the effects of both and these subsidies are distorting Europe’s market.”

Even after reform, European sugar farmers are still receiving nearly $700 million a year in subsidies to keep production up, and that is fueling some inefficiency, according to Chatenay. He explained that most of these subsidies are going to producers in the least efficient areas, while the most efficient producers are receiving no sugar-specific help and are going out of business.

Meanwhile, Europe is now exposed to the artificially-low sugar prices found on the heavily subsidized world market. Subsidies in Brazil, India, Thailand and elsewhere have generated a glut of surplus sugar that has pushed prices well below average production costs.

That’s imperiling even Europe’s efficient sugar businesses and farms without lowering overall food costs in the region. Plummeting sugar prices are being absorbed by industrial buyers, such as candy and snack companies, without being passed along to EU consumers, Chatenay said.

Europe was forced to overhaul its sugar policies after the World Trade Organization found its use of export subsidies and other programs to be in violation of international trade rules. And the rocky road that Europe experienced transitioning to a liberalized market is also an important consideration, Chatenay told the audience.

“Eighty-three sugar mills were closed, some 150,000 farms gave up growing sugarbeets, and tens of thousands sugar-related jobs were lost with the initial reform,” he said. “The latest reform will increase these losses because of the resulting low-price environment.”

Chatenay’s presentation mirrored a study he published in June about the effects of Europe’s changes.

U.S. sugar producers receive loans that are repaid with interest when their sugar is sold, rather than EU-style direct subsidy payments, and are wary of repeating Europe’s mistakes. They have endorsed a strategy known as the Zero-for-Zero sugar policy, which looks to simultaneously reform subsidies globally instead of unilateral disarmament.

N.C. Congressman Urges Agriculture to Speak Proudly with One Voice

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Congressman David Rouzer (R-NC) predicted significant turnover during the 2020 congressional election, and he encouraged agriculture to use the opportunity to work together to educate new lawmakers about the industry’s importance to America’s future.

“Agriculture is a bright spot, and we need to talk more about what we do,” he said at today’s International Sweetener Symposium. “A country that can feed itself and feed the rest of the world is in a dominant position to be prosperous at home and strong abroad.”

Agriculture is an economic powerhouse that creates jobs, provides opportunities in rural communities, and embodies the values that make America great, said Rouzer, a member of the House Agriculture Committee. But not everyone in Congress will understand its importance unless farmers and ranchers speak proudly about their successes and fight for their interests.

Rouzer noted that agriculture’s future success will depend on good farm policies with bipartisan appeal, as well as unity throughout the farm and ranch community. The overwhelming support of the 2018 Farm Bill, he said, was emblematic of what agriculture can accomplish when everyone comes together for the common good of all.

“It’s so critically important for us to remain united with one voice and remain active politically,” he said, explaining that the geographic diversity that agriculture possesses is an asset that can mobilize elected officials from both parties across the country.

Sugar is a good example of the power of a large geographic footprint, he said, because it brings together lawmakers from Midwestern sugarbeet states and sugarcane in the South. It’s little wonder, Rouzer noted, that no-cost U.S. sugar policy remains a fixture in the farm safety net.

“Hanging together and speaking with one voice is critically important to [sugar producers’] ability to protect your interests long term,” he concluded. “As long as I’m in the House, you’ve got a friend here and you always will.”

U.S. Sugar Producers Recognize Retiring Roberts, Conaway

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America’s farmers and ranchers were blessed during the last Farm Bill debate to be represented by Congressional leaders who worked well together and were determined to pass a farm bill on time and get it signed into law.

Sens. Pat Roberts (R-KS) and Debbie Stabenow (D-MI) and Reps. Collin Peterson (D-MN) and Mike Conaway (R-TX) were emblematic of how much Congress can achieve when people come together for a common cause.

Last week, Conaway announced that he will not seek reelection in 2020, joining Roberts, who announced earlier this year that he would retire in 2020.

“America’s sugar producers owe these two men a debt of gratitude,” Ryan Weston, chairman of the American Sugar Alliance, said this week at the industry’s annual convention. “We’ve faced tremendous challenges in recent years – from low prices to bad weather and rampant foreign subsidization – but thanks to our champions on Capitol Hill, we survived and continued to thrive.”

Both Roberts and Conaway have addressed the sugar industry at past conventions, Weston explained, saying, “we always knew that these two would put American farmers first, because that’s exactly what they have always done throughout their careers.”

Conaway, who addressed the International Sweetener Symposium in 2016 and 2017, was clearly a vocal supporter of America’s no-cost sugar policy.

“Sugar policy, for me, is easy to defend,” he explained to a roomful of sugar farmers who traveled to Idaho for the convention three years ago. “It works…it works for the American taxpayer, and more importantly it works for the American sugar producer.”

Roberts addressed the International Sweetener Symposium in 2015, telling farmers that he had “no intention of reopening and re-debating the farm bill,” thus preserving U.S. sugar policy.

Weston wished both Roberts and Conaway a happy retirement from Congress and said the industry is eager to work with Members who take on their leadership roles with the Senate and House Agriculture Committees in the next Congress.

“Our challenges aren’t going away,” he concluded. “Times are very tough in rural America right now and we look forward to continuing to work closely with Senator Stabenow and Congressman Peterson along with the next generation of Republican Committee leaders.”

Congressman Richard Hudson Proud to Support America’s Sugar Farmers

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“I’m proud to stand tall with [U.S. sugar producers] every single day …and I appreciate what you stand for.” That was the message Congressman Richard Hudson (R-NC) delivered at today’s International Sweetener Symposium.

Hudson, who co-chairs the Agriculture and Rural America Task Force, said America’s sugar industry supports thousands of U.S. farmers, thousands of U.S. workers, and billions in goods and services to the U.S. economy. So, supporting a strong U.S. sugar policy was an easy decision for him in the last Farm Bill.

“I want my sugar made here in America,” he explained, noting that he’s worked hard to defeat past attempts to weaken the country’s no-cost sugar policy.

“It would have crushed our domestic industry,” he said of a 2018 Farm Bill amendment designed to gut U.S. sugar policy and outsource our sugar production. “Foreign countries are subsidizing their industries, dumping their sugar, and bottoming out prices…that’s not a free market.”

That anti-farmer amendment was soundly defeated, which Hudson credits to the hard work of sugar producers, farm policy’s bipartisanship, and the solidarity of the agricultural community.

Agriculture is the top industry in North Carolina and in Hudson’s district. He emphasized the importance of agriculture continuing to work closely together to overcome current economic challenges and future political fights.

“I’ve worked hard to be a partner with you and everyone else in our agriculture community,” he concluded. “I strive to be someone you can count on, and I look forward to continuing that partnership.”

Farm Returns Below 2% for Fifth Straight Year as Rural Economy Slumps

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The average rate of return for U.S. farmers is 1.3 percent this year, marking the fifth straight year of returns below 2 percent, Dr. John Newton, the chief economist for the American Farm Bureau Federation (AFBF), said today at the International Sweetener Symposium.

That translates to a negative median farm income of -$1,449 this year, forcing most producers to depend on a growing amount of off-farm income to make ends meet. Returns this low create challenges for agriculture – from keeping pace with rising input costs to repaying operating loans – and the impact ripples throughout the rural economy, he said.

“Commercial debt in agriculture is at record highs, loan delinquency rates are rising, and Chapter 12 bankruptcies have increased sharply,” Newton told the group. “Some major lenders are reducing their exposure to agricultural loans and reducing lending volumes.”

Brian Cavey, senior vice president of government affairs for CoBank, said his bank continues to be a major agricultural lender, with 100 percent of its business focused on farm credit, agribusiness lending, and rural infrastructure.  But he agreed that current tailwinds in the rural economy are troubling.

“Right now, the name of the game is managing risk and uncertainty,” Cavey said.

This kind of environment necessitates strong farm policies to give lenders confidence that loans will be repaid in a timely manner. Protecting crop insurance and opposing cuts to the farm safety net are top priorities for CoBank, he explained.

The company was one of the biggest champions of America’s no-cost sugar policy during the recent Farm Bill debate for that reason.

The National Farmers Union, like the AFBF, was another vocal supporter of sugar policy and its president, Roger Johnson, explained that keeping sugar policy strong will be key to weathering the current storm.

“Farmers are facing an uncertain future, and they need some long-term predictability,” Johnson concluded. “With continued low commodity prices and the impacts that current trade disputes are having on rural America, the real question that we need to be asking ourselves is how to strengthen farm policy even more.”

Glenn Thompson Outlines His Top Priorities for Ag Committee

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Congressman Glenn “G.T.” Thompson (PA), the second highest ranking Republican on the House Agriculture Committee, kicked off the 2019 International Sweetener Symposium this morning by telling sugar producers that his vision for the Committee’s future is to “achieve a robust rural economy.”

“This requires the right farm policy for all our commodities, including sugar, that exceeds the expectations of our farm families,” he said. “If we can exceed your expectations, then rural America is going to do quite well.”

Thompson, who is the Ranking Member of the House Agriculture Subcommittee on General Farm Commodities and Risk Management, explained that he would continue to be a vocal supporter and champion for the country’s sugar producers.

Sugar policy is part of the 2018 Farm Bill and attempts to weaken it by a handful of opponents during debate on the House floor were summarily rejected thanks to Thompson and others.

“We defeated efforts to repeal the sugar program with a remarkable 141-vote margin,” he said. “That type of decisive [vote] should resolve once and for all that our current U.S. sugar policy is good for both the American consumer and for our hardworking sugar producing farm families.”

Thompson thanked the audience for their efforts to help secure a Farm Bill that was passed on-time, and he pledged to continue to fight attempts to weaken sugar policy in the next Farm Bill.

No-cost sugar policy, which is based on loans that are repaid with interest, is particularly important given the heavily subsidized nature of foreign sugar production, he noted.

In addition to maintaining a strong farm safety net, Thompson outlined other areas that he thinks are important for the House Agriculture Committee and Congress as a whole.

“The greatest challenges before agriculture are regulatory reform and resolving trade agreements,” Thompson explained. “Tackling both of those areas will help our farmers compete on a level playing field.”

Thompson also pointed to rural development and expanded educational opportunities as key to helping small towns rebound from current economic challenges and thrive.

World Sugar Prices Hit Rock Bottom, Poised for Recovery

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The world sugar market, which has been battered by low prices, may soon get a reprieve, according to the head of the International Sugar Organization.

Jose Orive, the group’s executive director, addressed the International Sweetener Symposium today and said, “World sugar prices have hit bottom, and signs are pointing to a recovery.”

That’s good news for global farmers who have been struggling with prices as low as 12 cents per pound – well below the average cost of producing sugar. To survive falling prices, many foreign governments have increased subsidies, which has only increased overproduction.

“The world is still suffering from high accumulated stocks that will need to be absorbed by the market before we can see any improvement on price,” Orive explained. But he is optimistic because production from big sugar suppliers appears to be declining, which will let stocks fall.

Brazil, the world’s biggest exporter, has seen production fall rapidly since 2017/18.  Production by the second biggest exporter, Thailand, is also down as farmers switched to alternative crops. Europe, another major producer and exporter, has also devoted fewer acres to beet production this year.

However, Orive warned that there are factors that could quickly change the outlook.

“Weather could provoke production variations, while consumption growth is declining as the war against sugar continues,” he said. “Government policies will continue, mainly for political reasons.”

India, now the world’s biggest sugar producer, is a prime example of the rapid impact policy changes can have on the market.

There, farmers are guaranteed prices for their crops and these price guarantees have continued to climb despite downward market signals. These cane prices combined with export quotas and subsidies are all being challenged in the World Trade Organization for violating international rules.

“The global sugar market is the most distorted commodity market in the world because of subsidies,” noted Jack Roney, a U.S. sugar industry official who moderated the panel. “Today’s low prices are a result of these subsidies, and any bullish signals can be quickly undone by government intervention.”

Roney said the extreme volatility of the world market is the reason America has a sugar policy, and he urged governments around the world to put an end to competing subsidies.

“U.S. farmers are highly efficient, and we want to operate in a free market, but that cannot happen until all countries set aside their subsidies and let a real market form,” he concluded.

European Union Serves as Warning to US Sugar Policy Critics

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A new report analyzing the impact of sugar policy liberalization in the European Union (EU) should serve as a dire warning to those who would like the United States to follow the EU’s lead and unilaterally eliminate U.S. sugar policy without addressing subsidies on the world stage.

This week marks 13 years since the EU first began tearing down its sugar program after the World Trade Organization found it to be in violation of its international trade commitments. Since that time, Europe’s sugar industry has faced an uncertain future – 83 sugar mills closed and 120,000 jobs were lost – and subsidies remain prevalent as prices plummet below the cost of production.

Authored by UK-based sugar policy expert Patrick Chatenay, this report takes a closer look at EU sugar market conditions following the latest chapter in EU’s reform: the end of sales quotas and minimum prices for sugar in October 2017.

“The immediate effects of liberalization have been catastrophic for the EU sugar industry,” Chatenay writes.

Chatenay found that now exposed to the oversupplied and chronically depressed global sugar market, driven by foreign subsidies, sugar farmers have seen an approximately 20 percent drop in prices while large industrial sugar buyers have pocketed $3.4 billion, “with no discernable advantage to the final consumer.”

This transfer of wealth from farmers to food processors has necessitated additional taxpayer subsidies to help prop up Europe’s farmers.  Totaling nearly $700 million a year, EU subsidies have further distorted Europe’s sugar market and driven prices even lower, according to Chatenay.

“EU sugar now operates with fluctuating, distorted and most often depressed world market prices, influenced by widespread government interventions,” the report states. “Not only must its most efficient producers compete with foreign subsidized sugar, but they also face competition from subsidies directed to [less efficient] EU beet areas.”

And this unfair competition is further threatening efficient EU producers and forcing them to cut costs by shuttering factories. Chatenay quoted one official as saying that “10 to 20 sugar [EU] factories will close within 5 years, given that about one-fifth of the EU mills are not competitive.”

Europe’s failed experiment over the past decade should serve as a stark warning to critics of U.S. sugar policy, say officials from America’s industry.

“Europe is often held up as a model for sugar reform, but the facts tell a much different story,” said American Sugar Alliance Chairman Ryan Weston. “European taxpayers continue to spend millions propping up the sugar industry while farmers face bankruptcy. Simply put, unilateral disarmament doesn’t work. A free sugar market will only be realized when every nation agrees to put an end to unfair subsidies that threaten highly efficient U.S. producers”

A recent report released by Texas Tech University put into perspective the harm that widespread government intervention has had on the global sugar market. The report profiled 22 foreign countries, accounting for 80 percent of global sugar production, and documented the widespread use of government support, tariffs, and subsidies that contribute to an unpredictable market.

Conversely, American sugar farmers do not receive government subsidy checks. U.S. sugar policy is based on the use of loans to store sugar until customers need it and then the loans are repaid with interest. This allows the sugar industry to maintain a reliable and affordable supply of sugar for U.S. manufacturers and consumers alike.

“The EU’s struggle to reform its sugar regime makes it clear that the distorted nature of the global sugar market as it stands will never allow for fair competition,” Weston said. “That is why America’s sugar producers are asking Congress to call a global cease-fire on sugar subsidies by passing Congressman Ted Yoho’s Zero-for-Zero resolution. We look forward to the creation of a truly level playing field.”

Texas Tech Releases New Global Sugar Subsidy Guide

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U.S. trade negotiators and lawmakers gained access to a helpful resource about foreign agricultural policy today when Texas Tech University unveiled a report on global sugar subsidies.

The study – authored by Dr. Darren Hudson, director of the school’s International Center for Agricultural Competitiveness – included profiles of 22 foreign countries that account for 80 percent of global sugar production and 83 percent of exports.

He examined major market players like Brazil, India, and Thailand, as well as those with which America is currently engaged in trade talks, including China, Japan, Mexico, Canada, and the European Union.

“There’s one common thread connecting every country,” Hudson said. “They all subsidize their own country’s sugar production to the detriment of others.”

This, he explained, has made sugar one of the world’s most distorted commodity markets. And to protect their domestic sugar industries from the associated price volatility, countries are creating more and more subsidies, which is adding to the oversupply and depressing prices further.

“Government intervention in the world sugar market remains extreme and widespread with a wide variety measures to support domestic sugar producers,” read the report.

Tariffs were a commonality among all countries in the Texas Tech report, with some in excess of 100 percent. Domestic price supports, debt forgiveness, and handouts for inputs such as fertilizer and equipment were also widespread. Ethanol programs that subsidize the use of sugar as a feedstock act as a price support and are gaining in popularity, the report found.

Brazil has long been the world’s biggest sugar producer, riding an estimated $2.5 billion in annual subsidies to a dominate share of the global market. But their dominance is being challenged by India, which has dramatically increased government support and exports in recent years.

An export subsidy, supply controls, tariffs, and soft loans were among the new Indian policies the report identified. India, whose supports are estimated at more than $1.7 billion a year, is currently being challenged by several countires at the World Trade Organization for excessive subsidization.

The United States is not included in the report. U.S. sugar policy – a combination of import quotas and loans repaid with interest – operates without taxpayer cost and exists as a response to foreign subsidies.

The U.S. sugar industry has publicly endorsed a concept introduced by Congressman Ted Yoho (R-FL), known as the Zero-for-Zero sugar policy, which would end America’s no-cost policy in exchange for other countries eliminating their trade-distorting programs and letting a true free market form.

Sugar Producers Praise Reintroduction of Zero-for-Zero Legislation

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Members of the American Sugar Alliance (ASA) praised Congressman Ted Yoho (R-FL) for taking decisive action against foreign sugar subsidies with yesterday’s reintroduction of the Zero-for-Zero sugar policy.

Zero-for-Zero proposes dropping America’s no-cost sugar policy in exchange  for the verified elimination of foreign sugar subsidies.

H.Con.Res. 7 details how foreign subsidies distort the international sugar market and hold prices well below the average cost of producing sugar. It specifically highlights Brazil, India, Thailand, Europe and Mexico for their egregious abuse of direct and indirect subsidies.

The billions spent by foreign nations stand in stark contrast to America’s sugar policy, which costs taxpayers $0 because it’s based on loans that are repaid with interest.

“America’s sugar producers are among the most efficient in the world, but it’s hard to compete with the treasuries of foreign countries,” said Ardis Hammock, a farmer from Clewiston, FL. “It will be impossible to establish a true free market in sugar unless these unfair subsidies are eliminated, and Zero-for-Zero recognizes that basic fact.”

Ardis grows sugarcane with her husband and son on a farm that’s been in her family for three generations. She’s proud of what her family has accomplished over the past 100 years but is worried about the future as prices remain low and foreign governments fuel overproduction. 

“Our no-cost sugar policy gives us a fighting chance to survive until reform to the world market materializes,” she said. “Congressman Yoho’s plan is common-sense legislation that says we’re not going to let foreign cheaters run hardworking Americans out of business.”

Unilaterally eliminating or weakening the current U.S. sugar policy without concessions from foreign nations would collapse the domestic sugar market, endangering 142,000 industry jobs and putting consumers at risk of foreign dependence.  

The American Sugar Alliance urged Congress to move quickly on Yoho’s effort.

Original co-sponsors of the Zero-for-Zero policy include Reps. Garret Graves (R-LA), Alcee Hastings (D-FL), Clay Higgins (R-LA), Walter Jones (R-NC), Paul Mitchell (R-MI) and Alex Mooney (R-WV).

Top U.S. Trade Negotiator Joins American Sugar Alliance Staff

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A trade negotiator with more than three decades of experience, including a key role in negotiating the Trans-Pacific Partnership Agreement, has joined the American Sugar Alliance as an in-house consultant.

Brian Grunenfelder will work alongside veteran ASA Trade Adviser Don Phillips in helping analyze the complex global trade issues that impact U.S. sugar farmers and shape America’s no-cost sugar policy.

Grunenfelder recently served as the Deputy Assistant U.S. Trade Representative in the Office of Agricultural Affairs. In this capacity, he led the U.S.-Japan Trans-Pacific Partnership Agricultural Market Access Group and managed agricultural negotiations with the Republic of Korea, Colombia, and Peru. 

Grunenfelder previously spent more than 25 years within the Foreign Agricultural Service at the U.S. Department of Agriculture.

“We warmly welcome Brian and are thrilled that he has brought his vast experience in agriculture and trade policy to the American Sugar Alliance,” said Ryan Weston, ASA chairman.

“America’s sugar farmers are increasingly under threat from unfair foreign subsidies and malicious trade practices,” Weston said. “Brian has the expertise to navigate these varied international challenges and will be an invaluable asset in shaping sugar policy here at home.”

Don Phillips, who will work with Grunenfelder to ensure a smooth transition, plans to continue with ASA in a more limited role, primarily focused on serving on the Agricultural Technical Advisory Committee for Trade in Sweeteners and Sweetener Products at the U.S. Department of Agriculture.

“Don has been a champion for this industry,” Weston added. “He’s guided us through numerous trade negotiations and conflicts, and he’s always done so with class, professionalism, and tremendous leadership. On behalf of 142,000 U.S. sugar farmers and workers, thank you, Don.”