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Farm Bill Fight to Cut Sugar Subsidies

Millions of dollars go to lobbying to keep U.S. sugar program afloat.

June 8, 2012 RSS Feed Print

Sugar seldom fails to sweeten the deal, but the exception might be the 2012 farm bill.

The fight over sucrose is seeping into congressional offices across the Hill, as lobbying firms on both sides sweet talk lawmakers and their staffs.

[Big Cuts to Food Stamps in 2012 Farm Bill.]

The disagreement is over whether or not to extend the U.S. sugar program, which restricts how much sugar can be imported from overseas and sold in the United States.

According to the CATO Institute, the restrictions inflate sugar prices here. The group says the U.S. buyer pays 36 cents for a pound of sugar, while sugar prices across the globe are on average 50 percent lower.

But reforming the U.S. sugar restrictions requires reworking a program that has remained virtually unchanged for decades.

Even in the first draft of the 2012 farm bill, there were no revisions made to the program, something that National Confectioners Association Spokeswoman Susan Smith says is evidence of how close the sugar growers are with legislators on the Hill.

"There are a lot of people who are not supporting sugar reform, especially members of Congress," Smith says.

In 2012, the sugar growing and production lobbies have poured more than $2.1 million into influencing legislators, according to Open Secrets. American Crystal Sugar, a leading lobbying group, has spent $951,300 alone over the last year.

Open Secrets also shows the groups have contributed to both Democratic and Republican legislators, giving nearly $3 million since 2011.

The top recipient was Michigan Democratic Senator and Chairman of the Senate Agriculture Committee Debbie Stabenow, who received $48,986 over the last year. Oklahoma Republican Rep. Frank Lucas, who chairs the House Committee on Agriculture, also got a nice donation of $39,000, Open Secrets says.

Sugar even has PACs. This year American Crystal Sugar doled out more than $1.2 million to candidates.

But confectioners across the country have also beefed up their game. This year, Open Secrets shows that companies like Hershey, Mars and the National Confectioners Association spent more than $1 million lobbying.

"We believe there is a good chance this year that we can win this," Smith says. "We have mobilized our members and we are stepping up."

Indiana Republican Sen. Dick Lugar has introduced an amendment to the farm bill that would do away with the sugar program.

"Government manipulation to increase U.S. sugar prices is driving jobs across the border and taxing American consumers," Lugar said in a statement about the amendment. "Continuing big sugar's handout costs private sector jobs at a time when the farm bill should be enhancing job growth."

Toni Chiappetta, a small business owner and manager of Sweetie Pies Bakery in Napa Valley, Calif., says the price of sugar is a huge factor in determining her bottom line.

"Any raw good affects our business. Our main purchases are sugar, butter and flour. Any time any of them go up, you cannot recover fast enough," Chiappetta says. "We have a small margin in this kind of business. And if sugar is expensive, it's all a trickle down effect."

Candy makers say that high domestic sugar prices and skyrocketing tariffs on imported sugar are keeping them from expanding their business or worse, forcing them to ship production overseas.

"More and more of our members, other sugar users, and consumers are seeing the devastating affect of the program," says NCA's Smith. "Growth isn't coming in the United States anymore because of the cost of the ingredients. I mean there is only one company in the entire country that sill makes candy canes."

A recent study from Iowa State University reveals that doing away with the sugar program could save American consumers $3.5 billion and create 20,000 more jobs a year in the food industry.

Tags:
Debbie Stabenow,
Richard Lugar,
farming

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