05.21.13

Hoeven: No-Cost Sugar Program Cost-Effective and Fair, Serves the American People

Farm Bill Supports Producers, Benefits Every American, Saves Money

WASHINGTON – Senator John Hoeven today spoke on the Senate floor in support of the Agriculture Reform, Food, and Jobs Act of 2013, stressing the importance of continuing the no-cost sugar program, which the senator said is cost-effective and fair, and should be retained in the Commodity Title of the Farm Bill.

The Sugar Program is cost-effective and fair

The senator’s remarks on sugar were prompted by recent suggestions that the sugar program be removed from the Commodity Title, despite the fact that it stabilizes sugar prices for consumers and industries at no cost to taxpayers. He said removing it will not create a free market or lower costs for consumers and industry.

“The problem is that dismantling existing sugar policy in our country would not, by any stretch, result in a free market for sugar for one very compelling reason: the world sugar market right now is totally distorted by foreign subsidies and tariffs,” he said.

World market prices are actually higher than U.S. sugar prices and the percentage of sugar in most processed foods is small, just 2 percent of a Hershey chocolate bar, for example. Hoeven said foreign governments heavily protect and subsidize their sugar producers. Countries like Brazil spend between $2 billion and $3 billion per year to subsidize growers. Mexico literally owns one-fifth of its industry and subsidizes the rest. And sugar prices are not only higher in Brazil and Mexico – they are higher worldwide.

“Dismantling our current sugar policy would accomplish nothing, but it would subject our producers, consumers, and industries more ruthlessly to that distorted market than they are today,” he said. “If we do away with sugar policy altogether and subject producers strictly to a distorted global market, what we will see is – not lower prices – but extreme volatility in the global sugar market. Moreover, it would threaten the 142,000 jobs in 22 states that depend on a vibrant, competitive sugar industry.”

A strong Farm Bill benefits every American

Senator Hoeven devoted the last of his remarks to the broader Farm Bill legislation, which saves more than $24 billion for deficit reduction, streamlines farm programs and ensures that farmers and ranchers continue to have a sturdy safety net through enhanced crop insurance.

“This year, the measure is moving quickly through the Senate because we’ve already debated and passed more than 90 percent of the bill in the last session. It was a good bill then, and it’s a good bill now,” he said. “Last week, we passed it out of the Senate Agriculture Committee, on which I serve, and where I had an opportunity to help craft it, in both this session and the last.”

“The 2013 Farm Bill, like the Farm Bill that passed the Senate last year, provides more than $24 billion in savings – more than what is required by sequestration – to help address the nation’s deficit and debt,” he said.

Hoeven emphasized the farm bill’s strong, market-based risk management tools for producers. The safety net in the 2013 Farm Bill focuses on enhanced crop insurance, not direct payments. And it enhances crop insurance with the inclusion of the Supplemental Coverage Option (SCO). The SCO enables producers to purchase a supplemental policy beyond their individual farm-based policy, creating an additional level of security.

The bill also features an Agriculture Risk Coverage (ARC) program, which provides assistance for shallow or multiple-year losses, helping farmers better manage risk.

“And let’s not forget, the farm bill strengthens our national security,” Hoeven said. “Our country doesn’t have to depend for our food supply on other countries, countries that don’t necessarily share our interests or values – and that makes us safer. The fact is we are secure in that most basic, vital necessity – our food supply.

“This is about all Americans. Good farm policy benefits every single American,” he said. “We have the highest quality, lowest cost food supply – not only in the world – but in the history of the world. This is about 16 million jobs in this country that are supported by agriculture. This is about a positive balance of trade that helps our economy. This is about $24 billion in savings where agriculture is stepping up and doing more than its share under the sequester rules to address the debt and deficit. In the most fundamental ways, a good Farm Bill makes America stronger, safer and more secure.”