America’s sugar policy is designed to cost taxpayers nothing. Zip. Zilch. Nada.
That seems like a pretty sweet deal. But how exactly does U.S. sugar policy work? It’s simple:
- The U.S. is the 5th largest producer and 3rd largest importer in the world.
- Existing trade deals provide preferential access to 41 countries, with the U.S. importing as much as 1/3 of consumption needs in recent years.
- The Farm Bill authorizes USDA to offer loans to domestic producers to provide for orderly marketing.
- Because loans are repaid with interest and there are no subsidy checks, the policy operates at $0 cost to taxpayers.
- If too much sugar is produced, U.S. producers store the excess at their own expense.
- If more sugar is needed, additional sugar can be quickly imported.
That policy gives sugar producers stability and predictability, allowing farmers and workers to keep America supplied with a reliable supply of high-quality sugar.
Our efficient industry, backed by a strong and flexible sugar policy, helped us respond to the challenges of 2020. To ensure store shelves stayed stocked during the first six months of the pandemic, sugar producers quickly shifted 90,000 tons of sugar from commercial outlets to consumer packaging. That means sugar producers redirected the equivalent of 45,000,000 four-pound sugar bags to store shelves in order to keep your pantry stocked.
Americans find sugar to be affordable, too, with a recent survey finding that 63 percent of Americans believe sugar is not expensive at all. A pound of sugar today costs about $0.65 – that’s down about 20 percent over the past 40 years when accounting for inflation.
Importantly, without a strong sugar policy, American sugar farmers and workers would be facing competition from a massively distorted global sugar market wrecked by foreign subsidies. While the countries below are among the worst offenders, market-disrupting policies are commonplace in most countries around the world.
On the global market, sugar prices barely cover half the average cost of producing sugar – a result of over-production and trade-distorting subsidies. Mega-subsidizers like Brazil, Thailand, and India flood and distort the world market with their surplus sugar using government subsidies and policies – in some cases in apparent violation of international trade obligations.
That’s why Congress has repeatedly rebuffed attempts to dismantle America’s no-cost sugar policy, most recently by an overwhelming 141-vote margin in the House.
All this at no cost to taxpayers? Now that’s smart policy.