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Published June 24, 2013, 10:01 AM

Sugar program maintains prices, supply

The free-trade fantasy world that columnist George Will lives in must be a very pleasant place.

By: David Berg, Agweek

MOORHEAD, Minn. — The free-trade fantasy world that columnist George Will lives in must be a very pleasant place.

But it doesn’t sound a lot like the real world where American sugar producers make their living.

Will’s harangue against U.S. sugar policy (“Sugar growers get sweet deal,” page 4) is built on the premise that our nation’s sugar policy is created solely to benefit a few thousand sugar beet and sugar cane producers. He couldn’t be further from the truth.

The common-sense policy that has been in place for several decades gives both consumers and producers the security that both prices and supply will be maintained.

‘Predatory practices’

According to Will, the sugar policy was part of a “temporary” commodity price support program created during the Great Depression. He is off by about a century and a half. Sugar tariffs actually were put in place in our country in the 1790s, so domestic producers would not be run out of business by predatory practices of sugar plantations in the Caribbean.

The fact that our country’s legislators have maintained these policies for more than 200 years is a clear indication that those same predatory practices remain a threat today.

A recent study by a British economic analyst indicates that the world’s largest sugar producing and exporting country — Brazil — provides $2.5 billion per year to its sugar industry.

Brazil has tremendous resource advantages, including cheap and productive land, low labor costs and next-to-no environmental regulation. But to seal the competitive deal, Brazil’s government provides $2.5 billion each year in a variety of subsidies to its sugar and ethanol producers.

It looks a lot like the same predatory practices that our country’s forefathers were concerned about are still alive and kicking today.

To unilaterally disarm our sugar policy would put our industry in jeopardy and leave us reliant on foreign supplies, something that hasn’t worked out in the past.

Will also inaccurately points out that surplus U.S. sugar “is bought by the government and sold at a loss to producers of ethanol.” While there are provisions in the 2008 farm bill that allow this kind of transaction to occur, not one pound of domestically produced sugar has been turned over to the government or converted to ethanol during the life of the 2008 farm bill.

In the real world, where U.S. sugar producers live and compete, there are harsh realities to be dealt with. One reality is that we are suffering from extremely low prices driven in large part by excess sugar brought to our country under the North American Free Trade Agreement.

Another is that agricultural producers must deal with both favorable and rotten growing weather. In 2012, most sugar producers saw wonderful growing conditions, and supplies grew tremendously because of those great conditions.

In 2013, many parts of the country are struggling to get a crop started — and supplies probably will shrink because of this challenging weather.

The U.S. has a domestic price support policy to make sure producers can afford and justify the huge investments required to produce beets and cane and to convert their crops to safe and affordable sugar.

Sugar consumers and our policymakers in Washington should understand that having the sugar shelf in the grocery store well stocked at prices that are competitive with any developed country in the world is essential.

Editor’s Note: Berg is president and CEO of American Crystal Sugar Co.

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