India Continues Bitter Sugar Subsidies

A new U.S. government report on India’s egregious trade practices, co-authored with the government of Australia, once again demonstrates the importance of a robust U.S. sugar policy.

As Congress is preparing to debate a five-year Farm Bill that includes a strengthened safety net for American sugar crop farmers – at no cost to U.S. taxpayers – U.S. and Australian officials are providing evidence to the World Trade Organization (WTO) of the billions of dollars in subsidies India has lavished on its producers.

India subsidized its sugar industry by a whopping $17.1 billion in 2022. Those subsides are “vastly in excess of levels permitted under WTO rules,” according to the report, and continued even after a dispute panel ruled in 2021 that India had violated its WTO commitments on sugar.

India continues to be the poster child of a world sugar market that is, at best, dysfunctional, and at worst, prone to volatile market swings due to manipulation. In fact, even after that dispute panel finding that India was subsidizing its industry by $13.4 billion in 2018, the subsidy levels continued to climb to $15.9 billion in 2019, $14.6 billion in 2020, $16.5 billion in 2021 and $17.1 billion in 2022. And those amounts do not even include the supports that India has been providing its sugarcane ethanol sector, which also serve to distort the world market.

Ultimately, billions of dollars in foreign sugar subsidies from huge sugar producing countries like India and Brazil encourage the over production of sugar. That surplus sugar gets dumped on global markets, driving world sugar prices down below the costs of producing that sugar.

Unlike other countries, U.S. sugar crop 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. India, on the other hand, is openly flaunting its WTO commitments to fair trade and repeatedly violating the rules. That is why Congress does not allow heavily subsidized foreign sugar to be dumped on our market.

The U.S. sugar industry has repeatedly called for an end to all global sugar subsidies, a concept known as zero-for-zero, and a modernized WTO that brings transparency and accountability to the world sugar market.

Until a true free market can be developed, weakening U.S. sugar policy would sacrifice our efficient American farmers to predatory practices, threaten 151,000 jobs, and undermine our national food security. All to benefit countries like India that continue to cheat the system with a bitter scheme of subsidies.

Support U.S. sugar producers by supporting a strengthened U.S. sugar policy.