An in-depth video produced by Iowa Public Television and shown across the country this week examined the highly subsidized global sugar market that forced the recent closure of Hawaii‘s last sugar mill.
Josh Buettner’s piece for the Market to Market segment spotlighted Alexander & Baldwin’s decision in December to shutter the Hawaiian Commercial & Sugar Company operation on Maui as an example of how the U.S. sugar industry is struggling in a world market that is manipulated by foreign governments.
U.S. sugar policy, the story noted, is the only thing many U.S. farmers and workers have shielding them from rampant subsidization abroad.
“We’re very proud of the fact that we are some of the lowest cost producers in the world, while we are adhering to some of the world’s highest standards for worker and food safety,” Jack Roney, Director of Economics and Policy Analysis for the American Sugar Alliance, said in the piece.
“We’ve really found a way to be both competitive and sustainable,” Roney said. “And people wonder: well if you’re so efficient, why do you need a sugar policy at all? And the answer is in the distortions in the world sugar market.”
Roney went on to explain that all sugar-producing nations subsidize operations, which creates surpluses that drive down global prices.
Brazil, as noted in the piece, is the biggest producer of sugar in the world and one of the worst subsidy offenders. In fact, it is often called the “OPEC of sugar” for its dominance of the global market.
PBS reported that U.S. sugar policy, which gives farmers access to loans they repay with interest and regulates the amount of imports, has historically cost taxpayers nothing. But this no-cost success story was interrupted in 2013 as a direct result of foreign subsidization.
Roney explained that in 2013 the U.S. government had to take extraordinary steps to keep the North American sugar market from collapsing after Mexico violated U.S. trade law and dumped subsidized sugar onto the U.S. market. The move pushed domestic prices to a 30-year low.
U.S. producers, the story explained, are pushing for the elimination of global subsidies in favor of true free market. In fact, U.S. producers have offered to eliminate U.S. policy in exchange for other nations ending their subsidies.
The plan, called the “Zero-for-Zero” sugar policy, was reintroduced by U.S. Rep. Ted Yoho (R-FL) this year.