Current Program Barrier To U.S. Trade

The Grocery Manufacturers of America yesterday outlined guidelines for reforming the U.S. sugar program before an audience of sugar growers at the International Sweetener Symposium in Sun Valley, Idaho. GMA emphasized that reform must balance the needs of growers, manufacturers and the trade obligations of the United States.

Those principles, as developed by the Coalition for Sugar Reform and laid out by GMA Director of International Trade, Sarah Fogarty, are as follows:

This means that shorting the market through production controls should be off the table, and market signals should be transmitted to all producing regions so that an imbalance of beet sugar relative to cane sugar can be avoided.

In recent years imports have been cut by as much as 40%. Reversing this trend is vital to accommodating the current and future trade obligations of the United States.

The current support system encourages more domestic production than the market demands. The operation and role of the support price, the loan program, the tariff rate quota and the forfeiture penalty all need to be analyzed in this context.

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Price movements have been the result of abrupt and arbitrary government policy changes, excess supplies induced by government programs and similar factors. A new policy should permit the price mechanism to operate with greater market-responsiveness than is the case today. “GMA believes that the current sugar program has not met the needs of either producers or manufacturers,” said Fogarty. “The sugar producers have constructed an unsustainable short term approach to a major structural problem. The program needs real, forward looking reform, not a short-term backward looking fix.”

“What is needed is a major policy overhaul, creating a program that meets both domestic and international market conditions for a true long-term solution,” added Fogarty. “GMA and the Coalition for Sugar Reform’s principles all have one overriding theme-that we should give more sway to market forces than the current policy allows.”

GMA said it will urge Congress to improve the farm bill, when it comes up for a vote next month, with an amendment sponsored by Rep. Dan Miller, R-Fla., and Rep. George Miller, D-Calif. The Miller-Miller language would create a program consistent with the principles outlined above and bring meaningful and significant reform to the sugar program.

The Coalition for Sugar Reform is a group of 18 organizations and associations whose objective is achieving market-oriented reform for the U.S. sugar program. GMA is a steering committee member of the coalition.

GMA is the world’s largest association of food, beverage and consumer product companies. With U.S. sales of more than $460 billion, GMA members employ more than 2.5 million workers in all 50 states. The organization applies legal, scientific and political expertise from its member companies to vital food, nutrition and public policy issues affecting the industry. Led by a board of 44 Chief Executive Officers, GMA speaks for food and consumer product manufacturers at the state, federal and international levels on legislative and regulatory issues. The association also leads efforts to increase productivity, efficiency and growth in the food, beverage and consumer products industry.

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