SUA urges Congress to reform sugar regime via 2007 Farm Bill

By Philippa Jones

- Last updated on GMT

Related tags: Sugar, International trade, World trade organization, Us

The Sweetener Users Association (SUA) has stepped up its campaign
to reform the US sugar regime, demanding that Congress modernize
the sugar program as it draws up the 2007 Farm Bill.

The SUA has sent a letter to members of the House and Senate Agriculture Committees, urging Congress to seize the opportunity offered by the 2007 Farm Bill to reform the American sugar price support program. The association wants the US sugar regime to be made "more flexible, more market oriented, less costly to American taxpayers, less damaging to American job growth, and more compatible with the nation's global trade obligations". "We do not advocate eliminating the sugar program,"​ said Larry Graham, president of the National Confectioners Association. "It is appropriate for Congress to support the incomes of sugar producers and maintain a healthy domestic sugar industry, but the needs of consumers, workers, independent refiners and industrial users should also be taken into account." ​ The SUA claims that the sugar program artificially increases prices by managing supplies through marketing allotments and import quotas. It says this approach is increasingly incompatible with US foreign trade obligations. When NAFTA (North American Free Trade Agreement) expires at the end of this year, the government will no longer be able to control Mexican sugar imports, according to SUA. Under the current sugar program, the government will therefore be forced to purchase more of the domestic sugar supply at a cost to American taxpayers of at least $1.3 billion over the next ten years. Each year, the US 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. While the SUA sees this as a problem, forcing sugar users and consumers to pay more, the American Sugar Alliance, a coalition of sugar farmers and processors, argues that the current structure avoids oversupplies and shortages and keeps sugar prices stable. The SUA is not alone in calling for changes to the US sugar regime. Georgia's Senate recently passed a resolution urging the state's congressional delegation to reform the sugar policy. The Senate called for "the type of reasonable reform to US sugar policy that will in turn stabilize our foreign trade and domestic economic policies". ​The European Union was forced to overhaul its sugar regime last year when the World Trade Organisation ruled that its regime was incompatible with its international obligations. But the US does not yet have this level of pressure on it to reform its sugar regime and the draft Farm Bill for 2007, tabled by the US Administration earlier this year, suggested that it does not intend to carry out any radical changes to the 2002 bill. The draft farm bill kept the essence of the 2002 bill and suggested little that would significantly reduce US expenditure on farm subsidies or put the US farm business on a more internationally competitive footing.

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