By KEVIN WALKER

Michigan Correspondent

WASHINGTON, D.C. — U.S. sugar interests are pushing back against efforts to overhaul the nation’s sugar program.

The sugar program uses price supports, domestic marketing allotments – sales quotas – as well as tariff rate quotas to influence the amount of sugar available to the U.S. market. The program supports U.S. sugar prices above comparable levels in the world market.

The sugar program was started with legislation in the 1981 farm bill and has been reauthorized in successive farm bills. Although the USDA says the sugar program is designed to operate at no cost to the U.S. government through efforts to avoid loan forfeitures, critics of the program say the complex management system costs sugar users in the form of higher prices.

A new group comprised of various interests, called Alliance for Fair Sugar Policy (AFSP), charges that the sugar loan program – part of the overall sugar program – allows large sugar processors to default on federal government loans. In 2013, this led to a nearly $259 million taxpayer funded bailout for sugar producers, the group charges. The AFSP is led by the National Confectioners Assoc. and Sweetener Users Assoc.

The AFSP is pushing legislation to revamp the sugar program. It says the Sugar Policy Modernization Act (House Resolution 4265 and S.2086) would guarantee that taxpayers would never again have to “pick up the tab for loan defaults by large sugar processors.”

According to a June 26, 2013, report in The Wall Street Journal, three sugar companies received most of the $1.1 billion in federal loans made to processors that year. Amalgamated Sugar Co., Michigan Sugar Co. and Western Sugar Cooperative, all grower-owned cooperatives that process sugar beets, borrowed 55 percent of the funds, though they produce about 20 percent of the country’s sugar.

The loans went to 17 processors altogether. The newspaper said it had to file a Freedom of Information Act request to get the documents naming the loan recipients.

According to information from the USDA’s Foreign Agricultural Service, in fiscal year 2017 seven beet processors received marketing allotments to process and sell sugar: in addition to the above companies, American Crystal Sugar, Minn-Dak Farmers Co-op, So. Minn Beet Sugar Co-op and Wyoming Sugar Co. all received allotments. Seven sugar cane processors in Florida, Louisiana, Texas and Hawaii also received allotments.

According to the AFSP, these 13 firms, plus one, are mega-processors benefiting from a “can’t lose” arrangement. “For years Congress has missed opportunities to reform the U.S. sugar program,” the group said in a statement. “This outdated and outrageous program has not been modernized in 80 years.”

The Sugar Policy Modernization Act, introduced in November, doesn’t appear to have made it out of any committee thus far. The firm GovTrack gives it an 8 percent chance of being enacted. AFSP spokeswoman Jennifer Cummings sounded hopeful that this year’s version of sugar program reform could make it into law.

Since the 2014 farm bill, “awareness of and outrage about the program have only grown,” Cummings said. She added the “historical trajectory” in farm bills is towards reform of the sugar program and that past attempts at reform only lost by a handful of votes in both the House and Senate. The AFSP would like to see the legislation embedded in the 2018 farm bill.

The American Sugar Alliance (ASA), a trade association, has dubbed the Sugar Policy Modernization Act the Sugar Farmer Bankruptcy Bill. In April the ASA penned a letter to leaders of the House Agriculture Committee, imploring them to continue their support of “America’s no-cost sugar policy.”

Sugar producers are facing “dire economic pressures right now, and a strong sugar policy will be essential to their ability to obtain financing and weather the storm,” the letter said.

In a separate statement, the ASA said America’s sugar program was developed in the 1940s when U.S. dependence on foreign sugar led to rationing. Mexico and Brazil’s “heavily subsidized sugar” threatens the U.S. sugar industry, the group says, adding it is in favor of a “zero for zero” policy – meaning it will be in favor of no subsidies for U.S. sugar once foreign subsidies for foreign sugar are addressed.

Regarding trade negotiations and the sugar program, last year U.S. sugar interests expressed concern that a tentative agreement with Mexico on the sugar and sweetener trade might contain one or more loopholes allowing continued “dumping” of Mexican sugar into the United States.

According to the ASA’s Phillip Hayes, that matter has been resolved. A June 2017 press release from ASA said the group decided to back the agreement after the U.S. Department of Commerce “tightened” the accord.