On Our Collective Wish List This Year? Reforming the U.S. Sugar Program

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by Kirk Vashaw, Spangler Candy Company

For more than 110 years, the Spangler family has worked hard to build a successful candy factory here in Bryan, Ohio, where we currently employ 520 people. Spangler Candy Company is the only major manufacturer of candy canes left in the United States. My family loves being a special part of the time-honored traditions and celebrations that make the holiday season a wonderful time of the year. But I don’t have to tell you that it’s not all sweet moments as a candy maker these days.

When people ask me what could significantly increase employment at our factory, I am always quick to answer, “Let us buy sugar on the free market.”  People usually expect a common business request such as lower health care costs, lower taxes, or less regulation, and they are puzzled why there isn’t a free market for sugar.

As you probably know, the federal government controls the domestic market for sugar. It artificially raises the price for the commodity to nearly twice the global market level by restricting the amount individual sugar refineries can sell in the U.S. In the candy industry, we’d all go to jail if we agreed to limit production in order to raise market prices. Yet, somehow this is okay when the government does it on behalf of the sugar industry.

In addition to limiting domestic sugar production, the sugar program limits imports through a Byzantine system of quotas and tariffs, while also financing the sugar industry through loans and government buy-backs. It really is an impressive racket.

This egregious example of crony capitalism serves a small group of wealthy corporate sugar plantation owners. The benefits of sugar subsidies and protections go directly to just 14 sugar beet and sugar cane producers in a handful of states.

Sugar is an essential ingredient in candy making, especially in candy canes. Ingredients are the costliest component of a candy cane, and sugar makes up 70 percent of our ingredient costs. That’s why in the year 2000, Spangler was forced to make the painful decision to move some of our candy cane production to Mexico.

Today, we have about 250 people making candy for us in Mexico. In 2017, Spangler had 900 people apply for jobs at our Ohio factory. I would love to offer 250 of them a job as a candy cane maker, but our government insists that sugar processing jobs are more important than manufacturing jobs. They are picking winners and losers and our town has been the loser for many years now. After all, the sugar subsidy program is the only Depression-era agriculture program with virtually no reform in its 80 years of existence.

We have a chance to help change the course of our businesses by urging our representatives in Washington, D.C., to address this serious inequity this year. Congress is set to take up the next farm bill in 2018. In fact, an impressive group of bipartisan lawmakers just this past November introduced a bill called the The Sugar Policy Modernization Act (HR 4265 / SB 2086). It was sponsored by U.S. Representatives Virginia Foxx (R-NC) and Danny Davis (D-IL), and U.S. Senators Jeanne Shaheen (D-NH) and Pat Toomey (R-PA).

The proposal is a modest reform, not an elimination, of the sugar program, and is fair to sugar producers and processors. In fact, the bill would remove the limits currently in place that restrict domestic sugar production, allowing U.S. producers to increase production as they wish. It would also require that government-backed loans actually be paid, the same way you and I have to pay back our business loans. That helps ensure that taxpayers don’t pay for sugar producer bailouts as they have in the past.

As Americans and candy makers, we are all paying a steep price for keeping this outdated sugar subsidy program. If we had access to fair sugar pricing, our employees would have a level playing field against foreign candy companies. Economic evaluations have shown one extra American confectionery job produces another seven American jobs up and down the supply chain, including suppliers, brokers, transportation companies, retailers and other industries that rely on us. We need these jobs in Bryan, Ohio.

The sugar program had net cost of about 123,000 American jobs between 1997 and 2015, according to the U.S. Census Bureau. Why does our government support a policy which it admits harms the American workforce? Perhaps the sugar program is one of the many reasons Americans have spoken up in recent elections to demand Congress have pro-American work policies. While only modest reform won’t bring back all of the jobs lost over the years, it will likely bring back some and is definitely a step in the right direction.

In addition to serving as the fourth generation family Chairman and CEO at Spangler Candy Company, I also have the honor of serving on the Board of the Trustees for the National Confectioners Association. NCA was actively involved in helping secure sponsors and co-signers of The Sugar Policy Modernization Act. Over the next several months, sugar reform is the number one item on our agenda.

Kirk Vashaw

There will be plenty of ways you can help. We’ll ask you to reach out to your representatives in Congress, invite them to tour your plant, and offer testimonials that we can use in our efforts to reform this outdated program that serves so few and hurts so many. In the meantime, please think about any specific ways sugar pricing has affected your business. Have you moved some manufacturing overseas, held off on expansion, or switched to other kinds of sweeteners? What story will you share with your representatives when the time comes?

My question to lawmakers is, “Whose side are you on? Will you vote for sugar reform to support American jobs, or will you vote for the status quo, which supports jobs in Mexico, Canada, China, Guatemala, Brazil, and other foreign producers of candy?” There’s only one right answer if you represent America.

Kirk Vashaw is the fourth-generation CEO of the family-owned and operated Spangler Candy Company in Bryan, Ohio.  Founded in 1906, the company is best known for high quality confections including Dum Dums lollipops and Spangler Candy Canes.