The U.S. sugar program began around the time of the Great Depression. With the enactment of “The Sugar Act of 1934,” sugar beets and sugarcane were named basic commodities and quotas were put into place for domestic sugar segments and foreign imports, as well as marketing allotments and labor provisions. At that time, sugar farmers were paid a direct subsidy of one-half cent per pound of sugar they produced.
Since its inception, the sugar subsidy program has only grown more entrenched with no reform measures to balance the impact on sugar users with sugar growers. The 113th Congress passed the “Agricultural Act of 2014,” a five-year farm bill that imposes many import restrictions and other market-shorting schemes, including limits on growing allotments for farmers, tighter tariff rate quotas and a sugar for ethanol program. During the farm bill debate, sugar reform was proposed and widely supported but ultimately fell short of passage by just a handful of votes. The U.S. sugar program remains the only agricultural subsidy program that has not been reformed.
The result: U.S. sugar using companies pay more for sugar than competitors in the global marketplace.
The U.S. sugar program continues to harm small businesses, consumers and workers today. American food manufacturers, consumers and taxpayers are footing the bill for a program that benefits one small, special interest group – the U.S. sugar lobby. The sugar program costs U.S. consumers and businesses up to $3.5 billion annually. The Congressional Budget Office’s March 2015 Baseline for Farm Programs forecasts the U.S. sugar program will cost taxpayers $115 million over the next 10 years.
There are 600,000 people employed in direct manufacturing in the sugar using industry that are negatively impacted by this program and 18,000 growers that are benefiting. Additionally, the sugar program has contributed to the loss of nearly 10,000 jobs per year in the U.S. food industry. Nearly 127,000 jobs were lost in U.S. sugar-using industries between 1997 and 2011 and the U.S. Department of Commerce estimates that for every one sugar-growing job saved by high U.S. sugar prices, approximately three American manufacturing jobs are lost.
Where Things Stand Today
There are currently pending bills in both houses of Congress that would put an end to tight sugar supplies, high sugar prices, plant closures, job losses and wasteful government intrusion on domestic sugar production. These bills would do the following:
- Allow flexible marketing allotments that enable The Secretary of Agriculture to allow sugar into the U.S. when necessary.
- Eliminate tariff rate quotas and allow sugar to operate on a free market system.
- Limit price supports to 18.75 cents per pound on raw sugar.
- Allow transfer quotas so other countries can sell their approved quotas to countries that have sugar available.
- Repeal the sugar for ethanol program, where the government buys back any unsold sugar at the end of the year for the subsidization and production of ethanol.
Action For Candy Advocates
Contact your Representative and Senators and urge them to co-sponsor H.R. 1714 and S. 475 (“The Sugar Reform Act of 2015”), and put an end to tight sugar supplies, high sugar prices, plant closures, job losses and wasteful government intrusion on domestic sugar production.