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U.S. Sugar Producers Efficiency

Without question, the U.S. sugar and sweetener industry is efficient and competitive. Every study, every measurement leads quickly to that conclusion. Yet, innuendos persist that for some reason, probably because there is a U.S. sugar policy, American sugar farmers need this protection because they are not very efficient and the sugar policy would fall by its own weight if it were not propped up by Uncle Sam.

The fact is, the U.S. sugar farmer can compete successfully with sugar and sweetener farmers all over the world and win. U.S. sugar farmers are competitive while at the same time providing higher wages, workers’ compensation, environmentally sensitive controls and all of the other societal and federally mandated benefits.

U.S. sugar policy is needed, not to help U.S. farmers compete with foreign farmers, but to put up safeguards for the domestic industry against market abuses by foreign governments. The governments of all foreign sugar-growing countries have various subsidies and market practices, such as dumping of sugar on the market at a well below production cost, that make a U.S. sugar policy necessary. U.S. sugar farmers can compete against foreign farmers but not against foreign farmers and foreign treasuries at the same time.

The U.S. sweetener industry was the first commodity group to fully endorse the Presidential plan in 1987 that called for total elimination by all countries of all farm subsidies by the year 2000. The U.S. sugar industry was confident then and is still confident that under such a level playing field it can compete successfully.

Landell Mills Commodities Studies of Oxford, England estimates the U.S. to be 2^nd lowest-cost among the world’s 31 major sugar beet producing countries and 29^th among 62 sugarcane producing countries. It also ranked the U.s. lowest cost among the world’s 13 producers of high-fructose corn syrup (HFCS), which accounts for slightly more than half of U.S. nutritive sweetener consumption.

They also concluded that U.S. sweetener producers are competitive and continue to gain in efficiency and productivity. The study ranked the combined U.S. sweetener industry (sugar beet, sugarcane, and corn syrup) at 11^th out of 104 countries and regions covered in the surveys. Productivity gains have been significant in the U.S. sugar industry. A study completed by the U.S. International Trade Commission in May 1990 illustrates, by converting the various price support mechanisms of the European Union, Japan and the United States into a common ad valorem tariff, that level of sugar subsidies in Europe and Japan are double or triple the levels provided by U.S. sugar policy.

Opponents frequently charge that U.S. sugar policy protects a small number of farmers and an inefficient domestic industry. This is false, and a number of studies by USDA and Landell Mills Commodities Studies of England confirm that the industry is, indeed, quite efficient and competitive. The truth of the matter is, U.S. sugar policy is in place to assure producers and consumers of a stable supply of sugar at stable prices, which is the proper purpose for any farm program.

As a commodity, sugar is an essential link in our food chain. In times of crisis in any country, sugar is one of the first foodstuffs to be rationed. This is another reason countries try to protect their supply of sugar.

U.S. sugar policy permits sugar imports because this country does not produce enough sugar to meet all of the U.S. needs. About 25 percent is imported. What the policy does is put up safeguards against uncontrolled floods of “dump market” sugar that would disrupt U.S. production and supply. What the “protectionism” does is set up safeguards against unfair market practices by foreign governments.

Rather than giving the U.S. sugar industry an advantage, as some critics claim, the U.S. sugar policy is aimed at preventing others from taking advantage of the U.S. sugar producers.

Without significant exception, every sugar producing country in the world has policies to protect its sugar producers, processors, and consumers. Would opponents of the U.S. sugar policy have this country unilaterally disarm itself?

It is highly significant that the U.S. sugar industry was the first agricultural group to support President Reagan in his call for an end to all subsidies. U.S. sugar farmers are efficient and can compete against any other sugar farmers in the world but they cannot compete against foreign governments, and that is why there is a U.S. sugar policy.

What else would be lost if there were no U.S. sugar policy? According to Landell Mills Commodities Studies, the U.S. sugar and corn sweeteners industries provide some 420,000 jobs for the U.S. economy in 42 states and generate about $26.2 billion in additional revenues for the U.S. each year.

Stable supply and stable prices for a vital link in our food chain, plus jobs and economic benefit for the entire country, are worth protecting.

An analysis of the issues affecting the U.S. sweetener industry along with information addressing those issues, prepared by the American Sugar Alliance

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