US Senator Jeanne Shaheen (D-NH) introduced a new bipartisan bill in the Senate this week intended to phase out the sugar support program, claiming sugar prices are artificially high and cost American jobs.
Co-sponsored by Mark Kirk (R-IL), the bill aims to eliminate about $4bn paid to subsidize US sugar production each year. US sugar policy was set with the 1981 Farm Bill and works on the principle that supply should not exceed demand. In order to achieve this, the government can restrict the amount of sugar that American sugar farmers can sell, restrict the amount that the US will buy to the level required by trade obligations, and divert excess sugar to ethanol production. The idea is that sugar prices should remain stable, but this has not always been the case, and US sugar prices are consistently above world sugar prices.
"The SUGAR Act protects consumers, saves American jobs, and allows US confectioners, bakers, beverage companies, and food manufacturers to stay in business,” Shaheen said. “…Sugar price supports are an unnecessary market intervention that have no place in our 21st century economy.”
The proposed legislation, called the SUGAR (Stop Unfair Giveaway and Restrictions) Act, has been welcomed by the National Confectioners Association (NCA), which has long campaigned for reform of the US Department of Agriculture’s sugar policy.
NCA president Larry Graham said: “The current sugar program artificially limits the supply of sugar in the United States, causing tremendous and sometimes irreversible harm to US candy makers, especially smaller candy companies. Due to the high cost of sugar and increasingly tight supply, US jobs at these companies are at serious risk. In the confectionery industry alone, we have lost 15,000 jobs in the last few years.”
However, the American Sugar Alliance (ASA), which represents the interests of US sugar growers, has consistently opposed food industry calls for sugar policy reform. The Alliance has previously told this publication that current US sugar policy has widespread support, claiming that it does not cost taxpayers anything, helps keep prices stable, and that sugar users are still making healthy profits.
No one from the ASA was available for comment prior to publication of this article, outside of normal business hours.
Senator Kirk said: “I am eager to work with Senator Shaheen on legislation to address federal price support and protection for sugar producers that continue to drive up costs for American consumers and send US jobs abroad. Such practice is outdated and ripe for reform.”