Trade group calls for reform to US sugar policy

By Lorraine Heller

- Last updated on GMT

Related tags Sugar International trade

A sweetener industry body claims the current US sugar policy is
harming the nation's food and beverage industry by driving prices
up and sending production oversees.

The Sweetener Users Association (SUA) last week urged members of Congress to take note of a Georgia State Senate resolution designed to encourage reform of sugar policy. "The current system of government production controls is hurting taxpayers, consumers and workers by distorting prices and reducing employment in the food and beverage industry. It is time for fundamental reform,"​ said Tom Earley, an economist with Promar International who has studied the impact of the sugar program. According to SUA, which supports manufacturers that use sweeteners, the Commerce Department last year published a study that cited the sugar program as a factor behind job losses in the food industry, especially in confectionery. "Georgia's state senators agree with the Department of Commerce that the current sugar program is sending tens of thousands of good jobs in the food industry overseas. We need to reform the program so we can keep those jobs in this country,"​ the SUA quoted Earley as saying last week. Each year, the government estimates sugar consumption and subtracts from that the amount of foreign sugar the US is forced to import, while American sugar farmers supply the remainder. According to the American Sugar Alliance, a coalition of sugar farmers and processors, this structure avoids oversupplies and shortages, resulting in sugar prices remaining stable. Consequently, this eliminates the need for government payments to farmers, said ASA. But SUA claims that by imposing government-regulated price floors, marketing quotas and import restrictions, domestic sugar prices are increased. This results in more ad more food companies sending their production oversees where sugar is cheaper, said the group, adding that this will eventually hurt domestic producers by undermining long-term demand for their product. SUA said the current structure of the sugar program is "increasingly incompatible"​ with the nation's foreign trade obligations and the changing realities of the global marketplace. "As trade agreements like NAFTA lower trade barriers and sugar imports increase, the government will be forced to purchase more and more of the domestic supply, costing American taxpayers at least $1.3 billion over the next ten years,"​ it said. The SUA's announcement follows a resolution passed by Georgia's Senate urging the state's congressional delegation to work for reform of sugar policy. The Senate had called for "the type of reasonable reform to US sugar policy that will in turn stabilize our foreign trade and domestic economic policies."

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