Sugar Producers Cite Unique Circumstances for Policy Needs

Apr 26, 2001

Sugar Producers Cite Unique Circumstances for Policy Needs
"Economic, domestic policy and trade policy crises profoundly threaten existence"

(April 26, 2001)

Citing economic, domestic and trade policy crises profoundly threatening the existence of growers and refiners, American sugar industry representatives proposed that sugar policy include a domestic allotment program – needing import quota and access concerns to be addressed by other congressional committees. Acknowledging that the Agriculture Committee does not have jurisdiction regarding Canadian import of "stuffed molasses" and import access on sweeteners from Mexico, sugar growers and refiners asked the Ag Committee to consider establishing several other short-term and long-term proposals, notably an inventory management to control domestic production relative to domestic demand and import requirements.

"As we near the end of these hearings on the future of farm policy, we are now faced with a difficult task," said House Agriculture Committee Chairman Larry Combest (R-TX). "We must use all the knowledge and information we have collected to shape legislation to report out of this committee by this summer. This process has not been easy, but I am confident that it has provided us with the tools we need to improve farm programs for America's farmers and ranchers. The sugar industry has a distinctive program and its own distinctive set of challenges facing the industry today and in coming years. I want to say that I appreciate sugar growers from different regions coming together to present a unified strategy in light of these challenges."

The United States is the world's fourth largest sugar producer, trailing only Brazil, India, and China. The United States is also the world's fourth largest sugar importer. The essential elements of current U.S. sugar policy are a non-recourse loan program and a tariff-rate quota (TRQ).

As outlined by the American Sugarbeet Growers Association president, the sugar industry has both short-term and long-term proposals:

Short-term recommendations, 2001:

1. Close the "stuffed molasses" import-quota loophole.

2. Solve Mexico import access issues.

3. Eliminate the sugar "marketing assessment" fee for fiscal 2002 and 2003.

4. Eliminate the sugar loan forfeiture penalty.

Long-term recommendations, the next Farm Bill, basic elements:

1. Continue the non-recourse loan program.

2. Retain the Secretary's authority to limit imports under the tariff rate quota system.

3. Operate the program at little or, preferably, no cost to the government.

4. Resume a government-administered inventory management mechanism, similar to that contained in the 1990 Farm Bill, and implemented once import-quota circumvention and Mexican import-access problems are solved.

Long-term recommendations, the next Farm Bill, related elements:

5. Rebalance loan rates.

6. Make loans available on in-process sugarbeet and sugarcane syrups.

7. Clarify ability to forfeit sugar loans made in September.

8. Restore processor bankruptcy protection for growers.

9. Eliminate the 100-point surcharge on sugar loans.

A little more than half of domestic sugar production is from sugarbeets, the remainder from sugarcane.

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