With so much attention on Mexico, chances are good you lost track of all the other foreign subsidy developments around the globe. ASA didn’t. We’ve been tracking foreign subsidies closely and will continue to spotlight them as the Farm Bill debate unfolds.
To get you up to speed, here’s a look at subsidy headlines from around the world:
- “Pakistan struggles to export sugar surplus as global prices plunge” – September 12, Reuters
Pakistan’s sugar industry was demanding a government subsidies as low world prices slowed exports and created a surplus in domestic supplies just as farmers prepared to harvest a bumper crop. Local mills, according to news reports, were struggling to pay farmers for new supply because of the lack of revenue from the decline in exports.
- “Morocco sees sharp rise in cooking gas, sugar subsidies” – August 2, Xinhuanet
“Morocco’s spending on cooking gas and sugar subsidies reached an equivalent of nearly 700 million U.S. dollars in the first half of 2017, according to official statistics.”
- “2017-2018 Budget: Increases for sugar actors” – June 30, Fiji Times
Fiji is expecting to grow 2,000 hectares of new sugarcane crop with an aggressive subsidies package that increases spending from $27.5 million to $60 million. The plan includes direct payments to farmers of $15.4 million to offset the cost of fertilizer.
- “India to forgive billions of dollars of farm debt” – June 8, Financial Times
Unrest in India has been deadly and it will be costly for the government as it tries to quell an uprising by farmers seeking debt relief and shelter from volatile commodity prices. Note: This isn’t the first time India has forgiven low-interest loans to bankroll its inefficient ag sector.
- “China slaps heavy penalties on sugar imports” – May 22, Financial Times
China’s import tax on sugar will go from 50 percent to 95 percent in response to a probe that found it was damaged by imports since 2011. Minimum price requirements inflated domestic prices and led to strong imports in recent years with Brazil rushing to fill much of the demand. Seems even China is worried about the “OPEC of sugar.”
- “Brazil government poised to cut debts and tax for farmers” – May 17, Reuters
Speaking of Brazil, the export behemoth will slash taxes on farmers and allow deep discounts on fines associated with a political move to help President Michel Temer gain support for pension reform. Brazil has struggled with legal challenges to its farm tax, which has about $3 billion in outstanding debt.
- “(India’s) government extends stock limits on sugar traders for six months” – April 19, The Economic Times
In addition to dealing with angry farmers, India’s government imposed rules to stop “hoarding and consequent profiteering” that it anticipates in the wake of sugar production declines and prices increases. Domestic production is expected to continue to drop below annual demand.
- “Azerbaijan beet growers to receive subsidy” – April 4, Agra-net
Farmers in tiny Azerbaijan are also jumping into the world of subsidized sugar. President Ilham Aliyev decreed sugar beet farmers will get about $7 a ton in payments to keep pace with heavily subsidized competitors.
With all this subsidy news, it’s clear something needs to change to promote freer trade in sugar around the globe.
That’s why U.S. sugar producers support the Zero-for-Zero plan by U.S. Rep. Ted Yoho (R-FL).
Under the plan, the no-cost U.S. sugar policy would be rolled back in exchange for the elimination of foreign subsidy programs. But until that happens, unilateral disarmament of America’s no-cost sugar policy would only jeopardize U.S. jobs while rewarding Brazil, India, Mexico, Thailand and China for their bad acts.