Gerard Scimeca – Chairman CASE
July 24, 2020
As U.S. farmers and ranchers struggle to maintain their footing during the Covid-induced economic downturn, they have still managed to largely keep our store shelves stocked nearly to pre-Covid levels. Though temporary shortages of food staples may appear from time to time, barns and fields remain full, ensuring our nation’s supply chain of food won’t be a victim of the ongoing pandemic.
That agricultural production remains flush through this unprecedented crisis stands as an enormous accomplishment. As just one example, in a recent survey of farmers in New York, sixty-five percent were negatively impacted by Covid, a statistic that has been replicated across the country. Yet the growing and harvests continue, and our farmers continue to deliver for our nation.
As if current circumstances were not challenging enough, now some American growers are facing an increasing threat from foreign producers, who are doubling down on subsidies and protectionist practices that serve to further undermine world agriculture markets. Two of the world’s biggest sugar growers, India and Thailand, have announced even more subsidies in order to bail out their farmers and dump cheap, below-market sugar onto the world market.
CASE has long advocated for the elimination of all global sugar subsidies and an end to tariffs and trade barriers for the world sugar market, which remains the most corrupted food commodity in international trade. The latest moves by India and Thailand demonstrate with crystal clarity exactly why ending these predatory trade practices in the sugar industry is so vital, both to consumers and our growers here at home.
America’s sugar farmers receive no subsidies or direct government assistance as they support over 120,000 jobs across dozens of states. While U.S. trade policy limits the amount of foreign-subsidized sugar that can enter our market, nations including China, Brazil, India, and Thailand are in a virtual bidding war to see who can subsidize their national sugar industry the most. The overall impact of this ongoing sugar arms-race is a total distortion of the market that results in supply gluts, then shortages, price instability, and financial stress on food production.
Free and fair trade is the ideal, but given the deliberate acts of other nations to not play fair, current U.S. policy is critical in standing as a dam against a flood of subsidized sugar that would send prices spiraling downward, put our farmers out of business, and then lead to prices spiraling upward. The supply disruptions and price instability won’t be limited to just the sugar on our store shelves, but the millions of food staples that require at least some sugar in their recipe.
Unbelievably there are actual critics in the U.S. who want us to abandon this policy and let the flood of cheap, foreign sugar flow through our store aisles and food manufacturing plants. They believe a “free-market” is right, regardless of the consequences. This is madness.
Rewarding predatory practices is not only not free-market, it also has real consequences for America’s farmers and will greatly harm consumers by bringing uncontrollable chaos across the food industry. What Americans can buy, and how much they can pay for it will be entirely in the hands of foreign competitors as U.S. growers will be all but wiped out by this unilateral surrender.
Further, it is bad policy. As America negotiates to achieve more fair and favorable trade deals with Europe and Asia, surrendering to foreign sugar sends the signal that we can be defeated if our foreign competitors play the subsidy game until we lose the will to compete. That would be beyond catastrophic for jobs, our economy, consumers, and the safety of our national supply chain of food.
The world has shown its hand, and does so again and again with more bailouts, subsidies, and protectionist policies in the sugar industry. The objective should not be to allow unfair and hostile actions be rewarded, but to stand firm for free and fair trade. The Zero-for-Zero policy introduced in Congress each year is the only viable answer on the table, an approach that makes all sugar producers end unfair practices and compete in a fair and free global market. This rewards the best producers, not the most corrupt governments. It’s time to put fairness back on the dinner table, for consumers and our farmers who have enough difficulties in keeping America fed.
