GMA is committed to the reform of the US sugar program in order to ensure a consistent supply at a reasonable, market-oriented price. As a major part of our effort to eliminate or reduce commodity program subsidies and restrictions that artificially inflate commodity prices, GMA for several years has served on the steering committee of a multi-association and member company coalition – the Coalition for Sugar Reform (CSR). The coalition opposes the current sugar program because of the negative impact that it has had on sugar purchasers, cane refiners, and consumers.

The US sugar program is in a critical state. In 2000, USDA bought over a million tons of sugar and paid farmers to plow under crops at a cost of $465 million, and is currently paying over $1 million per month to store surplus sugar. No longer can the program’s defenders claim the policy is “no net-cost” to the government. It is now apparent to nearly all observers that the current program is unsustainable in its current form. In October 2001, the U.S. House of Representatives approved a new farm bill that unfortunately takes U.S. sugar policy a step backwards. The legislation continues the current non-recourse loan program and adds marketing allotments for sugar – federal quotas on how much sugar can be legally grown and sold. This policy was tried before, failed, and was repealed in the 1996 farm bill at the request of the growers. In fact, in its report, “Food and Agriculture Policy, Taking Stock for the New Century,” the USDA noted that supply controls are “unworkable,” and the government price supports are “self-defeating.”

Perhaps more disturbing is the sugar growers call for a re-negotiation of NAFTA trade commitments so that no additional Mexican sugar enters the US market. This proposal not only is unreasonable, it is incompatible with the larger trade policy goals of the Bush administration.

During the consideration of the farm bill on the House floor, Representatives Dan Miller (R-FL), George Miller (D-CA), and several of their colleagues offered an amendment to eliminate marketing allotments and bring other modest reforms to the bill’s sugar provisions. Unfortunately, the amendment was defeated.

The Senate in February 2002 approved its version of the farm bill, with sugar provisions very similar to the House bill. However, the Senate bill also repeals the current one-cent penalty paid by processors when they forfeit their sugar to the government. In practice, this provision effectively raises the current loan rate for sugar by one cent. An amendment offered by Senator Judd Gregg (R-NH) to phase-out the sugar program was defeated.

OUTLOOK

GMA will continue to work with coalition partners to advocate market-oriented reform of U.S. sugar policy. Through the Coalition for Sugar Reform, GMA is working with farm bill conferees to retain the forfeiture penalty as they continue to negotiate a final bill. GMA will also continue to urge the U.S. to honor sugar-related commitments made in the NAFTA agreement, and ensure that liberalization of trade in sugar is included in future international trade agreements. GMA and coalition members are also meeting with freshmen members of Congress to educate them on the issue, as well as revisit congressional allies.

Staff Contacts

• David Stafford
  

• Gene Grabowski
  

• H.R. 1850 Sugar Program Reform Act
  
• S. 1118 Sugar Reform Act
  

• Coalition for Sugar Reform
  

BUZZ
• July 28, 2000  Coalition For Sugar Reform: Subsidy Program Is "Achilles' Heel" Of Trade Policy
COMMENT
• August 31, 2000  GMA Comments to U.S. Department of Agriculture, Foreign Agricultural Service, Request for Public Comment on Administration of FY 2001 Sugar Tariff Rate Quota
CORRESPONDENCE
• March 15, 2002  GMA Letter to Congress Requests Retention of One Cent Sugar Forfeiture Penalty
• April 5, 2000  Coalition for Sugar Reform Letter to USDA Secretary Dan Glickman, Oppose Surplus Sugar Purchases
NEWS RELEASE
• August 6, 2001  GMA Outlines Principles For Sugar Reform; Current Program Barrier To U.S. Trade