Leaders from America’s sugar industry arrived in Michigan and will begin their annual convention this week in Traverse City. Officials from the Trump administration, members of the state’s congressional delegation and renowned market analysts are here, too.
As chairman of the board for Michigan Sugar Company and president of the American Sugar beet Growers Association, I couldn’t be more pleased to help kick off an event that comes at such a crucial time.
Sugar producers, like other farmers throughout rural America, have been struggling with low prices and unfair trade practices abroad. The result has been a prolonged economic depression in the countryside, mounting pressure on farmers to obtain necessary capital and growing angst about the future.
Addressing these challenges will be front and center at this week’s convention, and a single piece of legislation will dominate much of the discussion.
Commonly called the farm bill, it helps farmers manage the unique risks they face, including Mother Nature’s unpredictability and foreign governments manipulating commodity markets.
The farm bill covers a myriad of important policies, ranging from research investment to farm credit and the insurance farmers buy to protect their crops. It also includes America’s no-cost sugar policy, which is built on loans that producers repay with interest rather than subsidy checks.
In June, the House and Senate passed separate farm bills that kept sugar policy strong, despite efforts from anti-farm groups to dismantle it.
Those opponents wanted to flood the U.S. market with subsidized sugar from abroad, essentially outsourcing America’s sugar production and more than 12,500 Michigan jobs.
Fending off the attacks was a hard-fought victory that was won because of industry unity and good friends on Capitol Hill who were willing to stand up for U.S. agriculture. Michigan’s delegation helped lead that charge, and many of them will address our meeting.
We are eager to hear from them and learn how the House and Senate will marry their two versions of the farm bill and pass final legislation before the current law lapses on Sept. 30. Enacting a new farm bill swiftly will be key to farmers’ futures.
We are also eager to learn from two of agriculture’s top trade officials – Gregg Doud, the U.S. Trade Representative’s chief agricultural negotiator and Clay Hamilton, with the USDA’s Foreign Agricultural Service.
These leaders are at the forefront of ongoing trade discussions around the globe, and we believe that sugar can provide great insight into the importance of holding our foreign trading partners accountable.
Sugar is the world’s most distorted commodity market because of rampant foreign subsidization. Brazil, India and Thailand receive $2.5 billion, $1.7 billion and $1.3 billion in annual subsidies respectively, creating an unbalanced market and a trading system that is neither free nor fair.
Believe it or not, sugar now sells on the world market for less than half of what it costs to produce. Here at home, sugar prices hover at the low levels of the 1980s, as we struggle to rebound from Mexico breaking U.S. trade law and flooding our market with subsidized sugar.
Mexico’s unlawful actions devastated sugar producers nationwide. In Hawaii, for example, the sugar industry folded after more than a century in business because of the resulting financial stress.
Unfortunately, things on the international scene continue to deteriorate. As sugar prices plummet, foreign subsidizers are piling on more handouts to give their industries a leg up. That further depresses the market with oversupplies, forcing other countries to erect more trade barriers to stop the flow of subsidized sugar.
In short, the situation is a mess, and fixing it will require America being tough on trade cheaters and standing up for U.S. farmers and ranchers.
We are fortunate that the next step in that journey occurs this week in our beautiful home state, where we’re proud to host the 35th International Sweetener Symposium.
Richard Gerstenberger is a third-generation sugar beet farmer from Snover, Michigan.