During the most challenging moments of the ongoing Covid-19 pandemic, America’s farmers have remained committed and steadfast in their work, putting in the hours, sweat and toil to make sure that our families and our communities have a reliable food supply that gets to market.
This has been no easy task, as U.S. farmers were already laboring under a shifting landscape that has been robbing them of their rewards for their efforts. Coupled with the economic downturn that has led to plummeting prices of their goods, U.S. farm are among the most strained industries in our nation.
CASE has stood fast as a staunch advocate of our farmers in general and in particular our sugar growers, as these institutions are so critical for America’s economy, for jobs, and for protecting our nation’s food supply.
American sugar growers especially are facing a mountain of challenges, as the global sugar market represents the very worst of unfair trade. To get a clearer picture, imagine any kind of business — a tire store, an ice cream shop, a plant nursery — that finds itself suddenly confronted by a rival business selling products at half of their actual cost. This competitor isn’t making money, because it doesn’t have to due to generous subsidies it receives from a foreign nation. Of course the aim of such a price strategy is to sink other businesses, so then it can profit by cornering the market and setting whatever price it chooses.
Of course we’d be outraged as such a scenario – which happens to be illegal — but this is what U.S. sugar growers face every day; foreign competitors who are subsidizing their domestic sugar production to the tune of billions of dollars a year, flooding the market with cheap product, and crashing the price to half of what sugar costs to produce. It is unsustainable, it is corrupt, and it is wrong.
The global oil market faced just such a scenario in recent months, when a glut of supply and the sudden downturn in economic activity led producers to have to pay to store oil at a cost above the value of the oil itself. On some markets oil was priced at -$30 a barrel, meaning the oil producers paid distributors to take the oil off their hands.
Of course this was only temporary and due to sudden factors beyond anyone’s control, not predatory competition. But once again, this price corruption is the daily reality our sugar growers face every day.
America’s sugar policy was designed and enacted specifically to prevent this corrupt and deliberate manipulation of sugar prices, by limiting foreign imports and protecting against price crashes from supply fluctuations. Given the alternative, it has been a tremendous success in protecting U.S. farmers and consumers. Those who wish to dismantle it and let the “market takes its course” are only opening the door to the chaos of predatory trade practices that aim to – and will succeed – in bankrupting our farmers and then dominating the market with supply and prices entirely dictated by overseas producers. This cannot be allowed to happen.
This is why American policy makers must remain firm and not cave to pressure to let down our guard, which would be a disastrous move, as other nations have found out the hard way. Instead, we must demand a free and fair playing field, adhered to by all nations, that includes ending sugar tariffs, ending subsidies, ending production quotas, and ending sweetheart deals that give financial advantages to foreign sugar production. Only when other nations abide by the rules of fairness and set aside their unfair trading practices should America reform our sugar policy.
CASE has long supported the best proposal yet to fixing the corrupt and distorted world sugar market. The answer is spelled out perfectly in a proposal from Rep. Ted Yoho (R-Fla.) titled the “Zero-for-Zero” policy, which would eliminate U.S. sugar quotas in exchange for the end of foreign subsidies across the board. Zero-for-Zero is a true free-market solution that removes unfair trade practices from the world sugar market and allows prices to be based on true production costs and a level playing field.
As we have stated repeatedly, “Until global sugar subsidies are eliminated, U.S. sugar farmers will forever be on precarious financial footing, even as we call upon them to help fill the grocery store shelves in this time of national crisis.” American farmers and consumers deserves a true free-market when it comes a secure and stable food supply, and an end to global manipulations and predatory trading practices.
