Congressman Pitts challenges US sugar policy

By Caroline Scott-Thomas

- Last updated on GMT

Related tags International trade

Congressman Joe Pitts (R-PA) has introduced legislation that challenges United States’ sugar policy, claiming that it is a waste of government money and costs jobs.

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, with market prices hitting a 29-year high in February.

Pitts’ proposed legislation, called the Free Market Sugar 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, although the trade organization said it does not expect a vote to take place during this Congress.

NCA claims that current sugar policy has eliminated 14,000 confectionery jobs and more than 75,000 food manufacturing jobs from the United States over the past decade as companies have moved to countries with cheaper sugar supplies.

However, the American Sugar Alliance (ASA), which represents the interests of US sugar growers, has consistently opposed food industry calls for increased imports.

ASA spokesperson Phillip Hayes told FoodNavigator-USA.com: “Congressman Pitts is clearly in the minority here. Support for sugar policy has increased on Capitol Hill, not decreased. I think he would have a really, really hard time getting this legislation through.”

He said that current US sugar policy has widespread support, claiming that it does not cost taxpayers anything, helps keep prices stable, and sugar users are still making healthy profits.

Announcing the legislation to scrap current sugar policy, Rep. Pitts said in a statement: “The USDA sugar program is a needless waste of government money that is actually counterproductive to the goal of creating jobs in the US… Since the program actually raises the US price for sugar, we see some food industry jobs shipped overseas.

“Sugar producers are using the public backing to pocket healthy profits. The American people are fed up with bailouts, and my legislation would stop public money from propping up companies that should be providing for themselves.”

In response to higher sugar prices and lower stocks earlier this year, the USDA increased its tariff rate quota for sugar imports – the amount that can be imported at a lower tax rate – to help increase the stock-to-use ratio.

Mexican sugar is the only sugar that can be imported without restriction into the United States, as it is protected by the North American Free Trade Agreement.

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