A U.S. sugar policy that costs taxpayers $0, protects American producers against foreign sugar subsidies, and keeps consumer prices among the lowest in the world should remain in effect in the next Farm Bill, according to a top industry economist.
Jack Roney, Director of Economics and Policy Analysis for the American Sugar Alliance (ASA), testified today before the House Agriculture Subcommittee on General Farm Commodities and Risk Management and said a strong policy is essential in the current low-price environment.
Roney explained that producer prices are as low today as they were in the 1980s because Mexico has been dumping subsidized sugar onto the U.S. market. In 2013, Mexico’s actions resulted in the only government cost to U.S. sugar policy sugar in the past 15 years.
“U.S. sugar policy can continue to operate at zero cost to taxpayers, and provide a genuine economic safety net for American sugar farmers, as long as Mexican dumping on the U.S. market does not persist,” Roney told the subcommittee.
In 2014, Mexico was found to be in violation of U.S. trade law and faced subsidy and dumping duties as a result. The two governments reached an agreement to suspend these duties in exchange for Mexico stopping its unfair trade practices.
“But the Suspension Agreements have not been successful and American producers are still being injured,” Roney testified, adding that the two governments are currently negotiating improvements. “We support these efforts, but if they are not successful, we support the imposition of duties on subsidized, dumped Mexican sugar.”
ASA is also worried about other subsidized competitors like Brazil, Thailand, India, and Europe that have distorted the world sugar market. Roney urged lawmakers to support a new resolution by Rep. Ted Yoho (R-FL) to target foreign subsidies in pursuit of a free market.
“This ‘zero-for-zero’ approach says that the U.S. will eliminate its sugar policy when foreign countries eliminate theirs,” he concluded. “But to give up U.S. sugar policy without any concessions from foreign subsidizers would be suicide…sending good American jobs to the countries still subsidizing.”
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