From the International Sweetener Symposium:
STOWE, Vt.- Returns have been low for the better part of three decades for sugar industries on both sides of the U.S.-Mexican border, but the two countries have dealt with the challenge far differently. That’s according to a new American Sugar Alliance (ASA) video released today at the 31st International Sweetener Symposium.
“Following years of flat sugar prices combined with rising costs, taxes, and regulatory burdens, the least-efficient [U.S.] producers went out of business,” the video explains. “But those that survived are now the cream of the crop.”
ASA explained that U.S. sugar cane and beet producers are now in the top-tier of world efficiency thanks to new technology, plant modernization, farmer cooperative arrangements, vertical integration, and investments in workforce training.
“But not everyone in North America favored these same business models,” ASA said. “[Mexico’s] inefficient producers stayed in business and aren’t making needed improvements…because the Mexican government bailed them out, taking control of half the country’s sugar mills to avoid bankruptcies.”
In addition to government ownership, ASA said other subsidies, including preferential loans, debt forgiveness, and cash to cover operating losses, are being used to “further coddle inefficient [Mexican] producers.”
With the aid of these subsidies, Mexican producers are now dumping sugar onto the U.S. market and harming U.S. farmers, workers, and taxpayers, ASA said.
“American producers and American consumers deserve better than being trampled by foreign treasuries and unfair trade practices,” the video concluded. “They deserve a market where hard work and ingenuity are rewarded, not punished.”
U.S. sugar producers filed antidumping and countervailing duty cases against Mexico in March. The U.S. government is currently investigating Mexico’s sugar industry to determine if corrective actions are needed to level the playing field.