Sugar Sees Bittersweet Debate in U.S. Senate


by Chris Clayton, DTN Ag Policy Editor

WASHINGTON (DTN) — Sugar farmers and companies got a bittersweet surprise Tuesday evening as the Senate opened debate on the farm bill by seeking to phase out the sugar program.

Still, a full debate on amendments to the farm bill is being held up by a senator’s desire to punish Pakistan for imprisoning the doctor who helped the U.S. military find and kill Osama bin Laden.

Rather than face a stalled farm bill, Senate leaders announced early Tuesday evening debate would begin on an amendment by Sen. Jeanne Shaheen, D-N.H., and supported by both Democratic and Republican senators who have pushed for changes in sugar policies.

Sugar growers and supporters note that sugar producers do not receive a direct subsidy. But critics argue they are guaranteed a floor price for sugar and imports of sugar are tightly controlled.

Shaheen’s amendment would require USDA to phase out the tariffs on imported sugar and ratchet down the loan rate for sugar.

Food companies that use large volumes of sugar have long howled about the prices they pay for sugar compared to the price on the world market. But sugar producers also are some of the largest campaign donors to members of the House and Senate Agriculture Committees and have often been able to avoid direct debates on the cost of sugar.

On the floor Tuesday, Shaheen said a phase-out of the sugar program was long overdue. She said the federal government artificially restricts sugar supplies and keeps the price of sugar at twice the world average. Only about 15{fd15d42d1b024b97d6d50958be27cc8145b6addb99e015780abccf2984117bb0} of sugar is imported at lower prices.

“No other crop has to deal with the kinds of restrictions and price controls that I just described,” Shaheen said.

Shaheen said the sugar program costs consumers and businesses $3.5 billion a year, according to at least one study. Further, those high costs affect about 20,000 jobs a year, she said. A vote on her amendment could come as early as Wednesday morning.

Senate Agriculture Committee Chairwoman Debbie Stabenow, D-Mich., whose state is a major sugar producer, took to the floor after Shaheen to defend the sugar program. She noted the program had “zero, zero, zero costs to American taxpayers” while protecting 142,000 jobs.

“Even with our sugar policy we are the second-largest importer of sugar, highest only to Russia,” Stabenow said.

Further, Stabenow said sugar prices are also higher in several European nations than in the U.S. “I would argue that our sugar policy is one that makes sense.”

While the amendment arguments began, Sen. Rand Paul, R-Ky., continues to push for a vote on his amendment offered last week to the farm bill to strip all foreign aid from Pakistan after the country sent Dr. Shakeel Afridi to prison for 33 years. Others, including Senate Ag Committee Ranking Member Pat Roberts, R-Kan., said Paul’s amendment was not germane to the farm-bill legislation.

Thus, senators began debate on two amendments, though Paul objected to the bill moving forward without addressing his Pakistani amendment even though Senate leaders agreed to debate one of Paul’s other amendments that would turn the food-stamp program into a state block grant. That proposal marries with a plan offered by the House Budget Committee to cut spending on the food-stamp program, also known by its official name as the Supplemental Nutrition Assistance Program.

As farm-bill leaders sought to find a manageable number of amendments to debate, the list continued to grow with 230 amendments filed for the bill as of late Tuesday afternoon. Republicans had been calling for an open debate on amendments.

Coming off the Senate floor, DTN asked Sen. Tom Coburn, R-Okla., if he expected to see a floor debate on an amendment he offered with Sen. Dick Durbin, D-Ill., to cap crop-insurance premium subsidies. “Well, who knows? We agreed to go to the farm bill without an agreement on amendments,” Coburn said.

Sen. Jim DeMint, R-S.C., filed 25 amendments on Monday, which ranged from repeal of all dairy subsidies to prohibiting compulsory or mandatory checkoff programs. On the floor Tuesday, DeMint railed on the overall costs of the bill. “Now, we’re poised to spend nearly $1 trillion more on a massive farm bill that some people in Washington have the nerve to tell the American people saves money.”

Calling the costs an affront to American taxpayers, DeMint noted the 2008 farm bill was projected to cost about $604 billion over 10 years while the current farm bill being discussed would cost $969 billion over 10 years.

“Yet, the folks who are speaking about the farm bill are saying this saves over $23 billion,” DeMint said. “Only in Washington could they look at you with a straight face and say this saves money.”

The Senate farm bill extends higher spending levels on food-aid programs such as food stamps that were part of the 2009 stimulus bill. DeMint notes that increased spending now gets locked permanently into the farm bill. DeMint said some politicians use food stamps to buy votes.

Durbin also went back to the Senate floor on Tuesday to again reiterate the need for cost savings in crop insurance. Durbin said farmers are buying insurance to protect themselves against the risk of low prices or bad weather. He noted 62{fd15d42d1b024b97d6d50958be27cc8145b6addb99e015780abccf2984117bb0} of the premiums are paid by taxpayers. Last year, the federal government spent $7.4 billion on premiums.

“The amount spent each year by taxpayers has grown dramatically,” Durbin said.

Durbin said the largest 3.9{fd15d42d1b024b97d6d50958be27cc8145b6addb99e015780abccf2984117bb0} of farmers accounted for 32{fd15d42d1b024b97d6d50958be27cc8145b6addb99e015780abccf2984117bb0} of the premium support provided by the federal government. One farm last year received $2.2 million in premium subsidies for nursery crops grown largely in Florida and valued at $57.7 million. Durbin cited a few other large farms drawing $1 million-plus premium subsidies. “These are pretty expensive farmers when it comes to the federal subsidy,” Durbin said. “We can’t justify continuing to provide this level of premium support to the wealthiest farmers.”

The Coburn-Durbin amendment would curb the premium subsidy by 15 percentage points for any farm making over $750,000 adjusted gross income. Durbin dismissed the idea that a farmer with $57.7 million in crop value would stop buying crop insurance if the federal government reduced the premium subsidy. The amendment would save about $1.2 billion over 10 years.

“We have to draw the line somewhere,” Durbin said.

Durbin added, however, “This is not an attack on crop insurance. Everywhere I go producers tell me crop insurance is the most important tool the federal government offers farmers to manage risk.”

In an amendment largely targeting Western-state cattlemen, Sen. Ben Nelson, D-Neb., offered a proposal Tuesday to eliminate taxpayer subsidies received by livestock producers who have rights to graze on public land. He noted those federal grazers, who account for 2{fd15d42d1b024b97d6d50958be27cc8145b6addb99e015780abccf2984117bb0} of all livestock producers, pay far less than market value for rent compared to other livestock producers.

“Given our huge federal debt and deficit, we can no longer afford to heavily subsidize an elite group of ranchers to raise their cattle on public lands at the taxpayers’ expense,” Nelson said on the Senate floor.


© Copyright 2012 DTN/The Progressive Farmer, A Telvent Brand. All rights reserved.

Posted with DTN Permission by Haylie Shipp


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