Issue link: http://read.uberflip.com/i/1332574
22 Sugar Producer FEBRUARY 2021 What's the Worst That Could Happen? Overseas hijinks demonstrate importance of strong sugar policy Next month, sugar growers and workers will meet with members of Congress and their staffs to discuss the importance of America's sugar industry. These annual meetings are key in educating policymakers about the ins and outs of sugar crops, the jobs our industry supports while producing an essential ingredient, and the stability provided by America's no-cost sugar policy. This year, representatives from the sugar industry will have plenty of hijinks to point to on the world stage as a warning of what could happen without America's sugar policy. America's sugar growers and workers have long cautioned that unilaterally eliminating the policy that protects Americans from unfair foreign subsidies would be disastrous without first securing similar commitments from our trading partners. And now, they can point to Vietnam as a real- world example. Vietnam had a policy that protected its farmers from highly subsidized imported sugar. It dropped the policy, and now the nation is swimming in cheap imported sugar that is drowning farmers in debt. A report from the Vietnam News Agency demonstrates the dire straits farmers now find themselves in: "Since the removal of tariff quotas, the total amount of sugarcane imported into Vietnam has increased rapidly, reaching approximately 1.3 million tonnes in the first 10 months of 2020. In addition, the price of imported sugar is also very low, causing many difficulties for sugar enterprises as well as farmers. "Faced with cheap imported sugar, Vietnam's domestic sugar price has fallen to a very low level, leading to low sugarcane prices. This, the conference was told, was one of the reasons sugarcane farmers have fallen into debt…" Unlike America's sugar policy, which utilizes operating loans repaid with interest and not subsidy checks, other nations— including Vietnam in recent years—make direct subsidy payments to farmers. These subsidies can create an incentive for oversupply. Then, these nations dump the sugar on the world market at prices below the cost of production. India is one of the world's largest sugar subsidizers, and it decided to close out 2020 the best way it knew how—by creating even more uncertainty in an already tumultuous global sugar market. Troubles in India contributed to wild swings in global sugar prices, again demonstrating how the stability of our no-cost sugar policy preserves America's reliable and affordable supply of sugar. India's sugar exports slid to a halt while the industry waited for the government to announce its export incentive policy. Last year, the country's scheme covered a multitude of expenses, including marketing expenditures and transportation costs. This totaled an estimated whopping $875 million in subsidies, according to a recent USDA GAIN report. That's only a portion of the $1.7 billion in direct and indirect government subsidies provided to Indian sugar interests that has put the nation in hot water with the World Trade Organization. While the world was uncertain whether India would subsidize its sugar exports, America's sugar industry wasn't surprised when India did approve another mega handout to its sugar producers. Other crops generally do not have to navigate such a wild roller coaster of prices or blatant violations of trade rules. Thankfully, America's sugar farmers and workers have the stability of U.S. sugar policy. Sugarbeet and sugarcane farmers don't need to plan next year's crop while trying to bet on market fluctuations that rise and fall based on the whims and pocketbooks of foreign subsidizers. Until foreign sugar subsidies and their devastating impact on our farmers and workers are a thing of the past, Congress must continue to protect America's no-cost sugar policy. n Unilaterally eliminating the policy that protects Americans from unfair foreign subsidies would be disastrous without first securing similar commitments from our trading partners. Now, we can point to a real-world example. FROM THE ASA By Phillip Hayes | Director of Media Relations