Washington — With the backdrop of Valentine’s Day, a holiday marked for its gifting of chocolates and other sweet treats, an editorial written by Representatives Virginia Foxx (R-NC) and Danny K. Davis (D-IL) was published in today’s edition of The Hill. The column, titled “Special interest’s sweet deal,” points out the burden the current U.S. sugar program places on consumers, calling it “a hidden tax that’s baked into every food, snack and treat.”
The column goes on to point out the tax “forces American consumers and small businesses to pay $2.4 billion to $4 billion to subsidize a handful of wealthy sugar processors every year according to the American Enterprise Institute (AEI).” The U.S. sugar program is the only commodity subsidy program that has not been modernized in 80 years.
The NCA recently released a statement on the shortfalls of the current sugar program, noting: “Candy makers work hard to provide consumers with their favorite year-round treats, and in doing so they also help fuel the American economy. But, they are shouldering significant hidden costs that Congress should fix this year. It’s time for Congress to say ‘yes’ to fairness, ‘yes’ to competition and ‘yes’ to creating American jobs.”
Foxx and Davis describe the current U.S. sugar program as a “complicated bureaucratic mess of price supports, market allocations, quotas and government guarantees that are ultimately covered by taxpayer dollars. At the same time, the program drives up consumer prices by restricting needed sugar imports even as it restricts domestic production at home, leaving the U.S. market with constant shortfalls.”
Noting that unlike other farm programs, the sugar program imposes its costs on American consumers and small businesses as a hidden tax on all products that include sugar. “And when we say it subsidizes a handful of wealthy sugar processors, we are talking about a group of 13 mega-processors. That’s right. The sugar program operates at the expense of all Americans just to benefit a group of 13 special-interest entities,” the Representatives state.
The U.S. sugar program forces manufacturers to pay twice as much for sugar as the rest of the world, according to NCA, putting American businesses at a competitive disadvantage when it comes to creating jobs. U.S. prices for sugar are artificially inflated as a result of special protections put in place by the federal government, including limits on domestic production and imports, industry loans, and forced purchases, the Association points out.
In November, a bipartisan and bicameral group of federal lawmakers introduced The Sugar Policy Modernization Act (HR 4265 / SB 2086), which seeks to end what the Coalition for Sugar Reform states is a program that harms companies that use sugar as an ingredient in their products while protecting a small group of politically well-connected sugar producers. Sugar was the only commodity program not reformed during the 2014 farm bill, the group maintains, resulting in billions of dollars in additional costs for businesses and consumers.
Between 2013 and 2014, $259 million in U.S. taxpayer dollars were used to bail out the processors and ensure their income, Foxx and Davis state, adding this came after the 2014 Farm Bill was inked.
Ultimately Foxx, chairwoman of the Education and The Workforce Committee, and Davis, a member of the Ways and Means Committee, called on colleagues to “commit to modernizing the sugar program to ensure it takes into account the economic interests of 300 million American consumers and the small businesses that are the backbone of our economy, not just the wealthy and connected in Washington.”