Sen. Lugar tours Indiana to rally support for sugar reform bill

29-Aug-2011 - Last updated on 30-Aug-2011 at 11:00 GMT

Senator Richard Lugar (R-IN) has been touring Indiana as part of a campaign calling for reform of US sugar policy, which he says keeps sugar prices artificially high and costs US jobs.

Lugar introduced the Free Sugar Act of 2011 in March, a bill that aims to end the sugar price support program – and has attracted broad food industry backing. The bill is still awaiting a Senate Committee hearing.

The American Sugar Alliance, which represents the interests of sugar cane and beet growers, claims that US sugar policy “hasn’t cost taxpayers a dime since 2001” – but Lugar says that the policy creates a hidden sugar tax.

“Sugar producers argue that it’s ‘no cost’ because they don’t receive direct payments,” Senator Lugar said. “Instead, businesses and consumers bear the burden for this welfare system— as much as $4 billion a year in higher costs, according to a recent estimate.”

Lugar has embarked on an Indiana-wide ‘Sweet Jobs’ campaign, touring the state in an effort to raise awareness about US sugar policy. He claims that the current policy – which has kept US sugar prices far above global prices – has led to the loss of American jobs, as food and beverage manufacturers have diverted their business to countries where sugar prices are lower.

“The price of sugar affects food and beverage costs for all Americans, as small businesses and confectioners are forced to raise prices for items such as bread, tomato sauce, peanut butter, and other common foods that contain sugar,” said Senator Lugar. “Every time Hoosiers see sugar listed as an ingredient on their food labels, they should know that are paying more than they should because of the federal government’s sugar policy.”

In 2006, the US Department of Commerce was tasked with investigating whether food manufacturing and sugar refining jobs had been moved overseas as a result of US sugar policy. Its report concluded that “for each one sugar growing and harvesting job saved through high US sugar prices, nearly three confectionery manufacturing jobs are lost”.

Current US sugar policy was set with the 1981 Farm Bill, based on the principle that supply should not exceed demand in order to keep prices stable. The government can restrict the amount of sugar that American sugar farmers can sell, restrict the amount that the US will buy to the level required by trade obligations, and divert excess sugar to ethanol production.

However, sugar-using businesses have been frustrated that US sugar prices have remained higher than global prices. Nineteen organizations and individual manufacturers have sent letters of support for Senator Lugar’s Free Sugar Act, including the Grocery Manufacturers Association, the National Confectioners Association, the American Bakers Association, and the International Dairy Foods Association.