Sugar Producer

30 Sugar Producer OCTOBER 2017 When Vincent "Zippy" Duvall took the stage recently at the International Sweetener Symposium, his presence at the event spoke just as loudly as his words. It was the first time in years that American Farm Bureau Federation was part of the annual gathering—signaling the importance of coalition-building as Congress takes up debate on the farm bill this year. "Our farm bill policies agree with the direction sugar producers want, and the Farm Bureau is going to be one of the best partners you've ever seen," Duvall said. The symposium, held Aug. 4-9, allowed the industry to hear first-hand from congressional leaders and industry experts on critical policy matters as global sugar supply continues to rise and prices continue to fall. Support for the 2018 farm bill was top of mind for everyone. FARM BILL DEBATE HEATS UP Leaders of the House Agriculture Committee were among the featured guests at the industry's annual meeting, giving sugar producers a glimpse of the debate that will unfold. The no-cost U.S. sugar policy is one aspect of the farm bill that is likely to have lots of support. "One of the big advantages you have is that your program doesn't cost money, and because of that, you're going to fly under the radar," said House Agriculture Committee Ranking Member Collin Peterson (D-MN). The policy has only been on the financial "radar" once in 15 years. And it only ended up there because Mexico violated U.S. trade law and dumped subsidized sugar onto the U.S. market. The U.S. and Mexican governments finalized an agreement in June designed to stop Mexico's predatory trade practices, and Peterson said he will remain vigilant to ensure this deal is strictly enforced. FROM THE ASA By Phillip Hayes | Director of Media Relations Symposium Spotlights Sugar Policy's Importance House Agriculture Committee Chairman Mike Conaway (R-TX) also addressed the group. He said the difficult economic times in rural communities since the last farm bill should make it easier to explain to others in Congress why farmers need strong policies to serve as a backstop against bankruptcies. Conaway hopes to conclude farm bill hearings soon and have legislation ready for floor deliberation in late 2017 or early 2018. "As we go through this farm bill, the lens I'm going to drive every decision through is what does it do to the cost of food," he said, explaining that farm bills should benefit grocery shoppers as much as farmers. And current farm policies like sugar, Conaway noted, are delivering "the most abundant, safest, and affordable food and fiber supply of any developed nation in the world." In addition to support from Congress and the American Farm Bureau Federation, the National Farmers Union (NFU) also reaffirmed its backing of U.S. sugar policy and called for broad support for the farm bill. Roger Johnson, NFU president, said the agriculture community must work closely with members of the nutrition and conservation communities to pass the farm bill. NFU has been a strong supporter of America's no-cost sugar policy for years because it helps U.S. producers survive in today's low-price environment and levels the playing field against heavily subsidized foreign producers. The upcoming farm bill is particularly important given today's tough economic times, he said. "A farm bill should address needs, not a budget," Rogers concluded. One of the needs, right now, is the sugar industry's continued access to loans that help producers make ends meet as they market their product. Those government- backed loans help keep prices stable and U.S. producers in business, which benefits food manufacturers. LOW PRICES, BIG PROFITS Without the sugar policy in the farm bill, America would be vulnerable to losing much of its domestic industry said Jack Roney, an economist with the American Sugar Alliance (ASA), in his remarks to the symposium. "Sugar is a unique commodity and our policy is unique in that it is designed to operate without taxpayer cost," he told the group. "Our growers don't have access to ARC or PLC, so we rely on government- backed operating loans that we repay with interest." Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) are farm bill programs available to other crops, and they are designed to provide financial relief when commodity prices fall below certain levels. Sugar producers, on the other hand, pledge their crops as collateral for loans designed to help them maintain their businesses throughout the year. Because loans are repaid with interest and no subsidy checks are involved, sugar policy has traditionally cost $0. "After a sugar crop is completed, producers must hold the inventory until food makers buy it and ultimately need the sugar in their factories," Roney said. "This keeps our customers from having to store massive quantities of sugar. That kind of just-in-time delivery would be nearly impossible without the cash-flow that government loans provide." And that just-in-time delivery has helped sweeten the food industry's profits. Despite nearly five years of declining sugar prices, makers of candy, cakes, cookies and other sweet treats never lowered their product prices for grocery

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