Of all the crops protected and promoted by decades of costly U.S. farm policy, none has put more bitterness in the mouths of free traders and Wall Street Journal editorial writers than sugar. They don’t just hate American sugar policy; they loathe it.<br>
Their revulsion comes by way of the twin umbrellas protecting the $21 billion U.S. sweetener industry: an 18-cents per pound price support and government-managed domestic and import quotas. Separately they cause apoplexy; collectively, angina.<br>
But American sugar growers and
processors – overwhelmingly the same people – have beaten these slings and arrows into candy and cookies since 1981, when that year’s farm bill reinstituted a sugar support program. All farm bills thereafter, including both the House and Senate’s 2007 models, have retained it.<br>
In this farm bill fight, however, the haters have two, new ideas on which to whip up anti-sugar hysteria.<br>
First, both the Senate and House farm bills bless the federal purchase, then resale to American ethanol producers, of once-NAFTA limited, now free flowing Mexican sugar into the U.S.<br>
None of the sugar-to-ethanol proponents know the cost of this new add-on, but best guesses are millions. All agree, though, the cost will be less than the taxpayer tab if Mexican imports drive domestic prices lower and cause U.S. producers to forfeit homegrown sugar to the government under the guaranteed 18-to-19-cents per pound USDA loan program.<br>
Second, in early January and without any government involvement, Mexican and American sugar players agreed to regulate the sweetener trade between the two nations to avoid “market chaos” they predict will result from the now-open trade door between them.<br>
At its core, the deal seeks to limit the impact of Mexican sugar on the USDA-managed American market while looking to jumpstart a Mexican ethanol industry to keep excess production south of the border.<br>
Both ideas have reenergized sugar’s loud critics. Some farm groups even are talking against sugar’s “managed” trade proposal, worried it will deflate corn-based, U.S. fructose exports to Mexico. (These groups seem to have forgotten that without sugar’s government umbrellas there wouldn’t be a fructose industry.)
As the reactionaries bray, however, serious people are seriously considering both ideas for the simple reason that the unrestrained trade now permitted under NAFTA – and soon through NAFTA’s baby, CAFTA – will wreak havoc (“a train wreck,” says the American Sugar Alliance) in both markets.<br>
The main benefactors of this carnage won’t be U.S. consumers who, sugar haters falsely claim, now pay three times the world price for sweetener. No, the big winners will be the usual suspects—big sugar users who want the one penny they now spend on sugar to make a candy bar to drop to one-half penny.<br>
In the meantime, the 146,000 sugar-related jobs in 19 states – the real reason for sugar’s almost bulletproof political support – will come under siege by global sugar subsidizers like Thailand, Brazil and other South American nations.<br>
Is that a good enough reason to consider sugar’s two new ideas – at least until a more uniform, multilateral trade agreement, like Doha, is completed?<br>
If not, let’s sweeten the pot.<br>
Today’s sugar support program carries zero cost to U.S. taxpayers. In deflated dollars, today’s U.S. retail sugar price is one-half 1980’s. <br>
In 2008, you’ll spend more for 10 gallons of gas than for sugar. Also, America already is the world’s second largest sugar importer and ethanol, ag’s new darling, will cost taxpayers billions more in subsidies this year than sugar ever has or will.<br>
So, as the free traders scream, American farmers, ranchers and consumers need to ask themselves: What’s costlier, a managed, continental sugar market or the loss of 150,000 jobs and a $21 billion industry?<br>

The views and opinions expressed in this column are those of the author and not necessarily those of Farm World. Readers with questions or comments for Alan Guebert may write to him in care of this publication.