U.S. Sugar Policy
U.S. sugar policy ensures America has an affordable supply of sugar and is designed to cost American taxpayers nothing.
U.S. sugar policy is contained in a piece of federal legislation known as the Farm Bill, which comes up for reauthorization by Congress every five years. A five-year Farm Bill was last reauthorized in 2018 and was extended for another year in 2023.
The Farm Bill authorizes the U.S. Department of Agriculture (USDA) to offer loans on sugar being stored for consumers by America’s sugar producers. The loans on the sugar are used to allow farmers to pay their bills while sugar is being stored for sugar customers. Producers are paid throughout the year as customers take delivery and pay for the sugar.
Sugar producers have nine months to pay back the loan. Because loans are repaid with interest and there are no subsidy checks, the policy operates at no cost.
To meet America’s sugar needs, USDA monitors the amount of sugar to be produced domestically along with sugar supplied from the more than 40 foreign countries given preferential access, through trade deals, to import sugar at, or close to, duty free into the U.S. market.
If demand exceeds domestic production plus expected sugar imports, preferential market access for additional foreign sugar can be increased to meet customer needs, or sugar can be imported at any time by sugar users so long as they pay a duty on those imports.
Sugar policy does not allow for unlimited amounts of preferential-access foreign sugar to enter the U.S. market. This helps provide American sugar producers with a more level playing field, given the heavy subsidization of sugar production around the world.
Zero-for-Zero
Sugar is widely considered to be one of the most distorted commodity markets in the world, with market-disrupting subsidies commonplace in many countries around the world. These distortions have resulted in so-called world prices for sugar that for decades has run at levels well below the world average cost of production.
American sugar growers are among the most efficient in the world. They could compete against foreign sugar growers on a level playing field, free of government intervention, but they cannot compete against foreign treasuries.
The U.S. sugar industry supports a “zero-for-zero” approach: if foreign countries were to give up their market-distorting subsidies, the United States would give up its existing sugar policy.
Absent foreign subsidies, a true free market could form, and the world market price would rise to reflect the actual cost of producing sugar. American sugar producers could compete – without the existing sugar policy – in the global sugar market, where prices reflect the actual costs of producing sugar.
Why Does U.S. Sugar Policy Matter to You?
American-made sugar starts with the crops grown by 11,000 sugarbeet and sugarcane farmers, who produce more than 9 million tons of sugar a year on roughly 2 million acres. Those farmers meet some of the highest labor and environmental standards in the world. Between 70% to 75% of our domestic sugar needs are met by American sugarbeet and sugarcane production
The U.S. sugar industry creates more than 151,000 U.S. jobs in over two dozen states and adds $23.3 billion to the U.S. economy each year.
U.S. sugar policy is the foundation for domestic sugar production, providing opportunities for family farms, supporting jobs in urban and rural communities, and strengthening our nation’s food security.
Sugar’s Coast-to-Coast Reach
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