U.S. Senator Daniel K. Akaka (D-Hawaii) joined a bipartisan coalition of Senators from sugar growing and farm states to defeat an amendment to the Farm Bill (S. 1731) which would have eliminated the sugar program. The Senate rejected the amendment, offered by Senator Judd Gregg (R-NH), by a 71-29 vote.

"The sugar program is vital to U.S. sugar farmers and ensures that sugar remains an affordable commodity for American consumers," Akaka said during Senate debate on the Gregg amendment. "U.S. producer prices for sugar have decreased by close to 30 percent since 1996. Many sugar farmers have gone out of business and a number of beet and cane mills have closed. In the same period, 17 sugar mills have closed. Seven of those sugar mills were located in the State of Hawaii. Over the past decade, Hawaii lost 137,000 acres of sugar, over 50 percent of the state's crop land. Rural communities in the islands continue to suffer because of these losses.

"The sugar program acts as a cushion against imports from the world dump market. It has been successful in ensuring stable sugar supplies at reasonable prices. U.S. consumers pay an average of 17 cents less per pound of sugar than their counterparts in other industrialized nations. Low U.S. prices save consumers more than a billion dollars annually. Consumers elsewhere do not enjoy the low prices we have in America. Most American consumers would be amazed at the price of sugar in other industrialized nations. That's why I say that the sugar program is critical to American consumers."

Traditionally, the sugar program operates at no cost to the U.S. Treasury. From 1991-1999, U.S. sugar policy generated $279 million in revenues. In 2000, the program had a modest cost for forfeitures of sugar loans. These costs amounted to only 1.5 percent of federal commodity program expenditures, and they will be defrayed as sugar is gradually sold back into the market. The Farm Bill would restore the Secretary of Agriculture's ability to administer the program at no cost to the Treasury through flexible marketing allotments and the acceptance of bids for government sugar in return for reduced future production. This authority was suspended by the 1996 Farm Bill.

"If we were to end the sugar program, a dynamic part of our farm economy will disappear from many rural areas and consumers will also lose a reliable supply of high-quality, low-price sugar," Akaka noted.

The Farm Bill passed by the House of Representatives earlier this fall would also continue the sugar program.