Conservatives See Farm Bill’s Sugar Program as Too Sweet

May 16th, 2018


Category: Commentary, Farm Bill, Miscellaneous, Sugar

(TheWallStreetJournal) –House Republican leaders have scheduled a vote on the farm bill for Friday, but haven’t yet resolved lingering GOP concerns over major planks of the legislation, including its support for the U.S. sugar industry.

GOP leaders have little room to maneuver, as they are trying to pass the new, five-year farm bill with just Republican votes. Most Democrats are expected to oppose it over provisions that tighten the work requirements for those receiving food stamps.

Many conservatives are uneasy over the structure of the bill’s subsidies for U.S. crops, particularly the price-support program for sugar, which they say amounts to far too much government intervention.

“I believe in free-market economics, so I’ve never believed in the sugar program,” said House Financial Services Committee Chairman Jeb Hensarling (R., Texas), who said he was still studying the bill. “I always thought American apple pie was baked with way too much Soviet-style foreign policy.”

The federal government’s role in the sugar industry has been controversial for years. As part of the federal safety net for farmers, the government also provides guaranteed loans for those who process sugar beets and sugar cane.

Unlike those who grow other crops such as corn and wheat, sugar farmers can’t apply for subsidies when prices fall below a certain point. Instead, they are eligible for government-backed loans for their operations. The government also effectively decides how much sugar companies are allowed to sell each year and controls how much sugar can be imported from other countries.

Even House Speaker Paul Ryan (R., Wis.) has indicated some discomfort with the sugar program but said his priority was ensuring the farm bill passes.

“I’ve long had views that the sugar program needs reforming,” Mr. Ryan told reporters last week. “But what I am most interested in is getting a farm bill passed into law.”

Many conservatives back an amendment from Rep. Virginia Foxx (R., N.C.) that would limit the ways that producers could pay back the loans. It would require that they pay off the financing instead of forfeiting their crops when prices are low.

Ms. Foxx’s amendment would also end federal requirements that a certain percentage of sugar purchased in the U.S. come from U.S. producers. The 2008 farm bill set the requirement that at least 85% of the U.S.’s sugar purchases must come from domestic processors, and the rest from imports.

Republicans from agriculture-heavy districts said they are prepared to defend the sugar program, which they have said is critical to keeping together the coalition of support for the broader bill.

“It’s a battle every cycle,” said Rep. Frank Lucas (R., Okla.) “It’s part of the overall strategy of maintaining [that] we have a high-quality, certain supply of ingredient from U.S. producers.”

Sen. Marco Rubio (R., Fla.) said it would be crippling to the sugar industry to remove the supports while other countries maintain protections for their sugar producers.

“It’s not a free market because the other countries are subsidizing their products,” he said. “I’m not going to let it get wiped out by unfair foreign competition.”

Food manufacturers argue that the guidelines are too restrictive, while processors say they have already made concessions to open up the U.S. market to imports.

Big food companies have pushed for changes to the U.S.’s complex sugar policy for years and argue the Foxx amendment would benefit companies and consumers alike by reducing prices.

“Policy makers understand that there is something inherently unfair about a program that is designed to boost profits of sugar producers while crushing end-users of sugar,” said the Alliance For Fair Sugar Policy, an umbrella of food, retail and taxpayer groups backing the amendment.

Trade groups representing sugar producers allege that the changes would eliminate farmers’ ability to get loans, and would open up the U.S. to a flood of cheap imports. Critics have circulated a letter that bankers and accountants who serve sugar processors wrote to congressional leaders, arguing against the changes.

One scenario is that GOP leaders allow a floor vote on Ms. Foxx’s amendment, but only after ensuring that there is enough opposition to defeat it, House GOP aides said.

Support for the overall bill could be bolstered by conservatives’ enthusiasm for its tighter work requirements for food stamp recipients, which President Donald Trump has made clear he will champion. That could pose problems in the Senate, where Republicans hold 51 seats and 60 votes will be needed to advance the bill.

The House farm bill would require most able-bodied adults between the ages of 18 and 59 without young children to work at least 20 hours a week to be eligible for food stamps under the Supplemental Nutrition Assistance Program. Currently the program has work requirements for those between 18 and 49. “The stronger the work rules are, the better,” said Rep. Jim Jordan (R., Ohio).



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