The Sugar Beat
Foreign Subsidies Take Center Stage in New Study
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A study[1] with detailed information about countries’ sugar policies was commissioned by the American Sugar Alliance and distributed this week to key staff at the U.S. Trade Representative’s office, the U.S. Department of Agriculture, and Congress. “We felt it was important to arm U.S. officials with the most up-to-date information available about worldwide sugar subsidies,” explained Russ Mauch, a North Dakota sugar farmer who was in Geneva to observe the last round of WTO talks. “We continue to ask our negotiators to make it a priority to demand reforms of these direct and indirect subsidies.” Among the trade distorting policies identified in this list: export subsidies in the European Union and India; marketing monopolies in Colombia, Guatemala, Thailand, and South Africa; a state trading company in China; import licensing in China, India, and Thailand; and the debt forgiveness and financing programs in Brazil. The study also describes how Brazil's huge ethanol industry, developed through government subsidies and mandates, has helped Brazil become the world’s biggest sugar producer and exporter. Such programs are the main reason that sugar remains the most distorted commodity market in the world, explained Mauch. Prices on the world dump market have hovered for years at a time at levels that are barely half the world average cost of producing sugar. America’s sugar farmers continue to argue that reform of the world sugar market requires a sector-specific approach that would discipline or eliminate the direct and indirect subsidies doled out by developed and developing countries. To date, U.S. negotiators have been unwilling to demand this kind of approach. “America’s sugar farmers are among the most efficient in the world, and we strongly support a global market where the best businesspeople, not the most subsidized, prosper,” said Mauch, the chairman of the American Sugarbeet Growers Association’s International Affairs Committee. “But if WTO negotiations continue down the current path, those who have done the most to distort and depress the world sugar market are the ones that will reap the biggest rewards and escape reform.” More than 75 percent of the world’s sugar is produced by countries like Brazil, India, China, Thailand, and Colombia that shield themselves from reform by claiming “developing country” status in the negotiations. Most of these countries have sophisticated agricultural industries, and U.S. farmers are upset that these major global exporters refuse to play by the same rules or make suitable concessions in ongoing trade talks. “The time for giving these countries a free pass is over,” Mauch concluded. “America can’t be the only one expected to make concessions.” The last meeting at the WTO crumbled after India, Brazil, and China refused to open up their markets to U.S. goods despite the proposed sharp cuts in allowable expenditures for U.S. farm programs—a stance that drew the ire of American farmers and ranchers. [1]For a copy of the study, please email subsidyhandbook@aol.com |
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