It’s Time to Eliminate Market-Distorting Subsidies and Share the Savings

(Alexandria, VA February 27, 2018) Regardless if you are a senior citizen living on a fixed income or families living on a budget going to the grocery store can really take a toll on your pocketbook. However, I think we would all agree that retail food is one of our most important expenditures because people need to eat to live healthy lives. Most people purchase retail food items every week, including meat, vegetables, fruit, milk, bread, eggs, snacks and many other items.

When you visit the grocery store I doubt very highly that you are thinking about farm subsidies or government policies that affect our market. As head of a seniors organization that monitors trends impacting the elderly, it is clear to me that all of us are affected by our nation’s current agriculture policy. Although I do believe we have a viable solution that will level the playing field and create a path toward a free market in sugar.

Yes, that’s right, sugar. The U.S. is a large consumer of sugar and domestic production does not fulfill all our needs for human consumption. Although we are one of the world’s largest sugar producers as well as one of the largest consumers of sugar the U.S. has never been self-sufficient in sugar production, but we do have a substantial and efficient production process.
You may be asking yourself like I did as to why the U.S. has a sugar policy given our need for imports is supposedly straight forward. However, the world market in sugar has been misrepresented by subsidies and foreign sugar is frequently sold at prices far below the cost of production. U.S. sugar producers are not in competition with sugar producers in other countries as much as they are in competition with foreign governments.

The governments of Brazil alone control more than 50% of the world sugar market while Thailand, India, and Mexico provide billions of dollars-worth of subsidies to their less efficient producers for domestic political reasons. As one would predict, their own markets cannot use the massive over-production and their governments to not want the cost of storing the sugar, so it is put into the marketplace for sale well below production costs.

With this kind of distortion by the actions of these foreign governments of the marketplace as led the U.S. constituents seeking the support and assistance of their government to level the playing field. This led to the need for a sugar policy to level the playing field and provide predictability to the market by smoothing out market fluctuations.
Critics of the policy argue that it runs counter to free market principles and that it is solely based on the adage, “I’ll scratch your back if you scratch mine.” I believe there is some truth to this as the program is clearly not a free market program, however given the massive intervention in the marketplace by foreign governments on behalf of their domestic industries, there truly is no free market in sugar.

U.S. sugar producers support a free world market, including the elimination of all global sugar policies. That is why after careful consideration and analysis I support the “Zero-for-Zero” sugar policy introduced by Rep. Ted Yoho (R-FL). Under this policy America would repeal its policy in exchange for other countries eliminating market-distorting subsidies. With the World Trade Organization, with all the countries at the table and all subsidies on the table, is the best venue to achieve free-market reforms. With that said, we can’t hastily jump into something that is going to make the situation worse and must wait until a true free market approach in in place. It is past time to level the playing field and support the Zero-for-Zero approach.