Florida Lawmakers Defend Sugar Subsidies

Feb 24, 2014

Credit Wikimedia Creative Commons

The sugar lobby was able to protect price supports for the industry during the latest debate over the Farm Bill. While South Florida lawmakers support the nation’s sugar program, they’re also bracing for changes down the road.

The recently enacted Farm Bill included major reforms for the nation’s farmers. Well, most of them that is. It ended direct crop subsidies and replaced them with taxpayer supported crop insurance. It also cut food stamps by around $8 billion. While those changes garnered bipartisan support, the sugar industry was protected by a bipartisan coalition. From the perch of most South Florida lawmakers, that’s a great thing. Democratic Congressman Alcee Hastings says the sugar program is vital for South Florida’s economy.

“A lot of people do not know, for example, machinists and truck drivers that work in the sugar industry number close, right in Florida, close to about 15,000", said Hastings. "And most of those people are making $60,000 or $70,000 a year.”

Besides jobs, Florida lawmakers, like Democratic Senator Bill Nelson, argue comparing the sugar program to other commodities is comparing apples to, well, sugar.

“[The] sugar industry has a different kind of thing – it’s not a normal kind of agricultural support program. It’s a different kind of thing", Nelson said. "It’s pegged to the world market price.”

Congressman Hastings says he’s seen up close how other countries prop up their sugar industries.

“I have had the opportunity to visit other countries that have subsidized their industries and are now claiming otherwise, for example Australia and India", Hastings said. "They are just waiting for the subsidies to be modified here in this country and I promise you that sugar prices will go up.”

But critics argue the sugar program costs consumers more than $3 billion annually by inflating prices at the grocery store, which they contend costs 20,000 jobs each year. They also say only 5,000 sugar growers benefit from the national program. New Hampshire Democratic Senator Jeanne Shaheen lost her floor battle to reform the sugar program. She says the program doesn’t pass the common sense test.

“It requires the government in some cases – I mean this is what’s really outrageous – it requires the government to buy sugar off the market and then sell it to ethanol plants at a loss to tax payers”, Shaheen complained.

Critics say the industry is so well protected because the sugar lobby is such an active force here on Capitol Hill. The Chairman of the House Agriculture Committee, Frank Lucas of Oklahoma, was lobbied hard from all sides while crafting the nearly one thousand page bill.

“I deal with every group from every perspective on these issues", said Lucas. "Whether it’s the general farm commodities group, the national farmers union, farm bureau, the cattlemen, the packers, the feeders. I would just simply tell you, if anything you can go through the Farm Bill and pick out the groups who worked the hardest and have worked the longest to achieve relationships.”

Lucas says the sugar industry is surely one of the lobbying groups that stands out to him.

“What is lobbying? It’s about explaining to the members and the committees and the committee staffers why things work and how they should work and getting your perspective across", described Lucas. "Arbitraging information I think is what the old economist professor would call it. Do the sugar lobbyists do a real good job? Yeah. But they’re one of a whole bunch of groups who do a real good job.”

South Florida Republican Congressman Mario Diaz-Balart says he understands the argument for ending supports for sugar growers, but he says the U-S shouldn’t do it alone.

“Look, if they stop subsidizing then we should stop these guarantees, but should we unilaterally disarm”, asked Diaz-Balart.

Still, Diaz-Balart says he’s open to reforming the program.

“I am always open to looking at any policy to make sure that whatever policy we’re looking, whether it’s been there a long time or not, that it still makes sense, that it still works, that it’s still efficient", said Diaz-Balart. "I don’t think it does anybody any good to just say unilaterally, ‘I’m not willing to look at any other options.’ I’m always willing to look at options.”

The nation is saddled with more than seventeen trillion dollars in debt, which means further spending cuts, tax increases or program reforms are coming. That’s why Congressman Hastings says the sugar industry and every other interest group need to prepare now for future changes.

“So toward that end the subsidies at some point in the future will be modified", said Hastings. "And there is no question about it. Just as will the so-called entitlements, be modified in some way. Otherwise our present state of being is unsustainable.”

While he awaits those changes, Hastings also warns critics of the sugar program not to move too quickly.

“There are people who are terribly dissatisfied with quote the 'Sugar Industry' unquote, but I notice they keep putting sugar in their coffee”, Hastings said.