New Report on Foreign Sugar Subsidies Released
Texas Tech University unveiled an update to its crucial 2019 report on foreign sugar subsidies, giving U.S. trade negotiators and lawmakers a valuable resource on the distorted global sugar market.
This study – authored by Dr. Darren Hudson, director of the school’s International Center for Agricultural Competitiveness, and Shawn Wade, assistant director – details the policies deployed by the world’s largest sugar producers to tilt the global playing field in their favor.
Virtually all sugar-producing countries offer government subsidies, market protections, or trade restrictions for their sugar sectors, making sugar one of the most distorted global commodity markets.
The report covers 29 foreign countries, accounting for more than 86% of global sugar production and 87% of exports.
Here are some key takeaways:
- The average value of direct foreign sugar subsidies has nearly doubled from $770 million in 2005 to nearly $1.4 billion in 2024. This does not include the “substantial government assistance” to the energy sector in the form of ethanol or biofuel programs, which act as a price support to foreign sugar industries.
- There are active ethanol or biofuel blending mandates in nine countries: Argentina, Brazil, Colombia, Ecuador, Guatemala, India, Indonesia, Turkey, and Zimbabwe. The ethanol program in Brazil is “by far the largest driver of domestic sugar prices.”
- Every single documented country uses import tariffs and quotas.
- The government plays a heavy hand in setting sugar prices in China, Egypt, Indonesia, Kenya, Mexico, Pakistan, Thailand, Turkey, and Zimbabwe.
- In the case of at least seven countries, the government owns most or some of the sugar industry or affiliated enterprises. The sugar industries in China, Egypt, Indonesia, Peru, South Africa, Turkey, and Venezuela all demonstrate some level of government control.
“This report from Texas Tech’s International Center for Agricultural Competitiveness helps benchmark the extent to which the global sugar market is increasingly distorted due to subsidization and government intervention,” said Dr. Rob Johansson, Director of Economics and Policy Analysis at the American Sugar Alliance.
“Our family farmers and manufacturing workers cannot fairly compete in a global market that rewards overproduction and leads to the dumping of surplus sugar. We hope that policymakers will soon take action to modernize U.S. trade policies so that American family farmers can compete on a re-leveled playing field.”
The United States is not included in the report. U.S. sugar policy – a combination of import quotas and loans repaid with interest – exists as a response to foreign subsidies while allowing the U.S. to maintain its status as the 3rd largest importer of sugar in the world.
