Ag Policy Blog

Sweetening up the National Discourse by Fighting Over Sugar

Chris Clayton
By  Chris Clayton , DTN Ag Policy Editor
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Phillip Hayes was excited to talk Thursday about presidential politics. Hayes especially wanted to talk about Sen. Ted Cruz.

Hayes is a lobbyist for the American Sugar Alliance. Like a lot of other major farm organizations, the Sugar Alliance took part in the National Association of Farm Broadcasters meeting in Kansas City, Mo.

Cruz, an aggressive campaigner against government programs, was largely seen as taking a shot at Sen. Marco Rubio of Florida on Tuesday night's GOP debate when Cruz offered a brief commentary on sugar policy. Rubio has big backers in the sugarcane industry.

"Sugar farmers farm under roughly 0.2% of the farmland in America, and yet they give 40% of the lobbying money." Cruz said. He added, "That sort of corporate welfare is why we're bankrupting our kids, and grandkids. I would end those subsidies to pay for defending this nation."

As Hayes highlighted in a brief interview, "People were left with this notion you can fund the military by cutting U.S. sugar policy."

A larger point is that Cruz would push to cut U.S. farm programs. Such criticism is part of a larger battle right, as reflected in the push in Congress and the Obama administration to cut crop insurance.

"If you look at the last three weeks, agriculture in general has been under attack," Hayes said.

Cruz's statements raised a lot of flags. First of all, sugar "subsidies" are not going to fund much military spending. From 2003-2015, actual sugar subsidies were $137 million, all coming in 2013. Sugar farmers that year forfeited on marketing loans because of low prices.

For a U.S. Defense budget of $600 billion and change, $137 million might fund a couple of wayward convenience stores in Iraq or Afghanistan.…

Sugar also largely is not subsided like other commodity crops. It's instead protected through strict import quotas. According to the most recent World Agricultural Supply and Demand Estimates, the U.S. will produce 8.8 million tons of sugar this year, up about 1.8% from the 2014-15 crop. The U.S. also will import about 3.4 million tons, of which about 1.5 million tons will come from Mexico. So just over one-quarter of U.S. sugar use comes from imports.

Then there's the volume of lobbying money given by sugar farmers compared to other groups and the 40% figure. In pure lobbying money, the Center for Responsive Politics shows the sugar industry (beets and cane) have spent $8.2 million in 2015 on lobbying. The "agribusiness" sector as a whole has spent $97.6 million. That equates to sugar taking up about 8.4% of lobbying funds for the industry.……

In another area, sugar in 2015 has spent about $2.74 million on reported contributions to candidates. Agribusiness as an industry has spent $23.5 million. This is a relatively small sum on a presidential election race that's expected to cost $5 billion. It's early, though. In the 2012 presidential race, about $5.3 million in contributions were tied to sugar out of about $92.5 million from agribusinesses.

Cruz' attack on Rubio, though, came after a scorching editorial last week in the Wall Street Journal over Rubio's ties to sugar. As the WSJ wrote, "There is no economic defense of the sugar program, which every year provides nonrecourse loans to sugar processors at a guaranteed price-per-pound. If the market price is below the guarantee when they want to sell, the processors simply dump the crop on the U.S. Department of Agriculture as the loan repayment. To avoid that outcome, the USDA holds sugar prices artificially high by imposing tariffs on imports above an annual quota. The result is that Americans pay about twice what the rest of the world pays for sugar."

Rachel Maddow quoted the WSJ editorial in a column suggesting Rubio's ties to "Big Sugar" demonstrate a vulnerability.…

Incorrect facts, however, apparently do not create any vulnerability for Cruz.

The editorial then quoted the Coalition for Sugar Reform, which claims sugar subsidies are costing America jobs that would be generated by further opening up the sugar market and importing more from elsewhere. You have to assume if the U.S. were to increase sugar imports, policymakers would then have to get rid of marketing loans for sugar producers because the decline in price would otherwise lead back to more farmers turning over their sugar to the federal government, right?

Regardless, the Wall Street Journal and others dismiss the arguments that sugar policy is tied to national security. Groups like the American Sugar Alliance make that case because of sugar rationing during World War II. There are actually other "national security" reasons not to encourage more imports of cheaper sugar.

As the New York Times reported this week, American adults keep getting more plump. (I can personally attest to this fact.) Roughly 38% percent of us are "obese," up from 35% in 2011-12. The increase was alarming for some researchers, given some changes regarding trans fats, more food calorie labels and a decline in drinking soda.

Obesity rates are unchanged for kids, but there are still 17% of kids ages 2-19 years of age who are considered obese.…

Our access to sugar-laden sweets is not the single reason we seem to keep gaining wait, but this fight over sugar policy should at least recognize that average Americans apparently have far more access to affordable sugar products than we need. And if you are going to declare that U.S. sugar policy is a subsidy, and thus a government expense, then you should also take into account the cost to Medicaid, Medicare and other federal health-care expenses if you demand policy changes to open up the flood gates to cheaper sugar.

Trumping Ethanol

Donald Trump declared in Iowa that he loves ethanol after touring a POET ethanol plant. At an event later in Fort Dodge, Iowa, Trump said, “You know what? I went out to see some of the folks on the ethanol. Good stuff and great people, put a lot of people to work out here. I just want to thank them, they’re doing an amazing job.”

On Wednesday, Trump had told a crowd in New Hampshire that he was going to put out a report on ethanol. Later, a group called, "The Center for Regulatory Solutions" a/k/a "a handful of Washington lobbyists," put out a statement saying they were thankful he was going to look at the issue. This group, which looks like big-industry astroturf, had put out a report saying ethanol has cost New England $20 billion in lost economic value.

America's Renewable Future had put a report earlier this week ranking presidential candidates on ethanol and had given Trump a "good" rating.

Follow me on Twitter @ChrisClaytonDTN


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