Sugar War Could Impact Beet Industry

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by Jim Spencer, Star Tribune

WASHINGTON – An unexpected declaration of war by corn syrup makers against sugar refiners in the nation’s capital will likely resonate in Minnesota’s Red River Valley.

The Corn Refiners Association, a trade group made up of four giant agribusinesses including Minnetonka-based Cargill, has hired lobbyists to gut a part of the U.S. sugar program that lets sugar makers pay back government loans with sugar instead of cash. Minnesota’s nation-leading sugar beet growers consider the program’s controversial but long-standing combination of price supports, loan guarantees and import quotas crucial to their survival.

“This is the first time that I’m aware of where you’ve got one ag group hiring lobbyists to attack another ag group,” said U.S. Rep. Collin Peterson, D-Minn., a 25-year House member and one-time chairman of the House Agriculture Committee.

It is also the first time the century-old corn refiners group has so directly challenged the legendary sugar lobby. “The sugar program has become an embarrassment,” refiners association president John Bode said. “Since the [2013] farm bill, there have been substantial defaults [on government sugar loans]. … We think it’s reasonable to limit the potential taxpayer loss.”

The sugar program lets sugar refiners borrow money from the government and put their product up as collateral. In 2013, oversupplies of sugar drove down prices and led some refiners to forfeit sugar rather than pay cash for loans. The sugar program does not allow the government to sell forfeited sugar for food in the U.S. So the government was forced to sell at very low prices in the world market or to U.S. ethanol makers. As a result, the government collected hundreds of millions of dollars less than what sugar companies owed.

 

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Source:  Star Tribune

Sugar Beet Harvest by ClizBiz, on Flickr
Creative Commons Creative Commons Attribution 2.0 Generic License   by  ClizBiz 


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