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Sugar policy reform bills attract industry support

By Caroline Scott-Thomas , 08-Apr-2011

Sugar policy reform is back on the US legislative agenda, as two new bills that aim to end the sugar price support program have attracted broad food industry support.

The Free Market Sugar Act was introduced by Rep. Joe Pitts (R-PA) and Rep. Danny Davis (D-IL) on Wednesday, a week after Senator Dick Lugar (R-IN) introduced his Free Sugar Act of 2011.

The American Sugar Alliance, which represents the interests of sugar growers, claims that US sugar policy “hasn’t cost taxpayers a dime since 2001” – but Lugar says that the policy creates a hidden sugar tax.

“Every American business that makes candies, ice cream, cookies, bread, or sells lattes, sandwiches, or cupcakes, is paying more than twice the world market price for sugar because of this hidden tax,” Lugar said. “American consumers pay for this tax, while more and more sugar users are being driven out of business because of off-shore producers who don’t have to pay high prices dictated by the US government.”

Current US sugar policy was set with the 1981 Farm Bill and works on the principle that supply should not exceed demand in order to keep prices stable. The government can restrict the amount of sugar that American sugar farmers can sell, restrict the amount that the US will buy to the level required by trade obligations, and divert excess sugar to ethanol production.

However, US sugar prices have remained far above global sugar prices – a situation that has led to frustration among sweetener users who claim that costs are unacceptably high.

Commenting on the bipartisan Free Market Sugar Act, president of the National Confectioners Association and chairman of the Coalition for Sugar Reform, Larry Graham, said: “American consumers and manufacturers have been harmed by the current sugar program for far too long. This legislation will help bring an end to unnecessary and wasteful federal government intrusion.”

Congressman Pitts claims that the legislation would "restore competition to the industry and keep jobs here in America."

In 2006, the US Department of Commerce was tasked with investigating whether food manufacturing and sugar refining jobs had been moved overseas as a result of US sugar policy. Its report concluded that “for each one sugar growing and harvesting job saved through high US sugar prices, nearly three confectionery manufacturing jobs are lost”.

Meanwhile, the Grocery Manufacturers Association (GMA) was one of 19 organizations and individual manufacturers to send letters of support for Senator Lugar’s legislation.

Its letter to Lugar said: “Artificial prices hurt not only businesses – from the corner bakery to some of the largest employers in America – but also the customers they serve. GMA strongly supports the market based reforms embodied in your legislation and urges Congress to pass the Free Sugar Act of 2011.”

Meanwhile the American Sugar Alliance has accused industry of trying to “flood the sugar market with subsidized imports so they can increase corporate profits.” It says that sugar, which is grown in 18 states, supports 146,000 US jobs and contributes $10bn to the economy each year.

The United States is the world’s largest consumer of sweeteners, including sugar and high fructose corn syrup, and is one of the world’s biggest sweetener importers, according to the US Department of Agriculture.

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