Heap of sugar

Sugar Program Leaves Bakers with a Bitter Taste

Denis Storey
April 20, 2018

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It’s 2018. That means we get the World Cup, a royal wedding, and what promises to be some pretty dramatic midterm elections.

It also means Congress must once again pass a farm bill. This exercise takes place every five years and almost certainly includes a debate over the country’s quietly controversial sugar program. 

The House Agricultural Committee passed this year’s bill – dubbed the “Agricultural and Nutrition Act of 2018” – out of committee on April 18, but not without controversy.

A Closer Look

For starters, lawmakers drafted the 641-page bill behind closed doors and rushed it through committee in less than a week.

And while Democrats have blasted the bill’s attempts to tinker with the Supplemental Nutrition Assistance Program, it’s far from the only controversial provision. 

As it stands right now, the bill strips funding from several “important local and regional food programs,” while also failing to reauthorize the Organic Certification Cost Share Program, which helps farmers cover certification expenses.

Finally, and this is probably the best part, the 2018 farm bill includes an amendment that – for the first time – would outlaw the slaughter of cats and dogs for sale or consumption. Violations could earn offenders a year in federal prison and fine of up to $2,500. 

A Spoonful of Price Support

But that’s not the worst of it. What the committee did not debate, or even bother to discuss, is the nation’s sugar program that, according to the American Bakers Association, costs bakers and consumers more than $3.5 billion annually, and more than 127,000 jobs over the last 20 years. This program props up U.S. sugar prices with:

  1. Tariff-rate quotas: These caps limit how much sugar companies can import into the United States. Anything beyond that suffers a punitively high tariff.

  2. Price supports: This establishes a minimum sale price for sugar, which also happens to be much higher than the global market price.

  3. Domestic marketing allotments: This prevents excess supply by limiting how much sugar companies can produce domestically.

  4. Feedstock Flexibility Program: This provision of the law, first introduced in 2014, compels that U.S. Department of Agriculture to buy what’s determined to be excess sugar in the market and resell it to ethanol refineries, often at a considerable loss.

This outdated economic policy, which dates back to the Spanish-American War, has done nothing more than make U.S. sugar about twice as expensive as anywhere else in the world, which costs taxpayers but makes life harder for bakers of all sizes.

If there’s any silver lining – or filling – there are finally rumors of reform this year. And despite the party-line committee vote that sent the farm bill to the full House, reforming the nation’s sugar program is one of those increasingly rare bipartisan issues that everyone seems to agree on. Well, that and the whole “not eating pets” thing, but they already took care of that.

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