In our view
America's sugar policy takes the cake ... literally.
Ongoing subsidies to sugar growers have propped up prices to food manufacturers -- and, consequently, to consumers -- and led companies to outsource an estimated 127,000 jobs in the past 15 years.
The subsidies have long been a point of congressional debate. Two Pennsylvania lawmakers -- U.S. Sen. Pat Toomey and U.S. Rep Joe Pitts, both Republicans -- are now sponsoring separate bills to reform the federal sugar program.
The pair have the support of the Coalition for Sugar Reform -- an alliance of consumers, food and beverage manufacturers and advocacy groups -- which seeks to fix this Depression-era policy.
Because the United States has never been able to produce enough sugar to meet domestic demand, the U.S. Department of Agriculture, since the 1930s, has imposed price supports which establish a minimum price for sugar produced by sugar cane growers in the South and in Hawaii, and sugar beet growers from Minnesota to California.
The federal government subsidy comes with strings attached: Sugar processors are forbidden from selling more sugar than the subsidy provides -- even if the demand exists.
The program also imposes sugar import quotas, which are subject to a high tariff.
The offshoot? Refined sugar prices in this country were 63 percent higher than world prices last year. Since the 1980s, U.S. sugar prices have been 64 to 90 percent higher than world prices.
That has forced U.S. companies to ship manufacturing jobs offshore because they can import foods made with sugar outside of the United States and thereby avoid the tariff.
And the clincher? In times of surplus, the federal government, which already is subsidizing sugar growers, must buy the excess sugar and sell it to ethanol plants at a loss through the Feedstock Flexibility Program. The coalition contends that could cost U.S. taxpayers an additional $100 million next year.
Does any of this make sense?
The Sugar Reform Act of 2013, which includes both Senate and House bills, would not end the subsidies known as allotments, nor would it end tariff-rate quotas.
It would instead require that those allotments and quotas be adjusted to reflect market rates worldwide. And it would repeal the Feedstock Flexibility Program for bioenergy producers.
The reason Toomey and Pitts brought their Sugar Reform Act show to Lancaster County can be summed up in one word: Jobs. Pennsylvania employs more than 41,000 people in companies that use sugar from baking to cereal manufacturing to candies.
Congress last year failed to update the farm bill. It instead crafted an extension. A measure that passed the U.S. Senate but failed in the House would have cut some farm subsidies but would have protected sugar growers.
The existing sugar policy hurts consumers and manufacturers. It forces companies to outsource jobs and production.
The bills introduced by Pitts and Toomey would create a fairer, more market-driven policy. That would aid manufacturers and consumers, not just growers.