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The Honolulu Advertiser
Posted on: Saturday, September 8, 2007

Sugar growers look for sweet win on loan rate

By Ana Radelat
Gannett News Service

HOUSE BILL WOULD RAISE INCOME FOR SUGAR FARMERS

The House farm bill would raise the U.S. Department of Agriculture’s sugar program loan rate by half a cent, from 18 cents to 18.5 cents per pound of raw cane sugar and from 22.9 cents to 23.5 cents per pound of refined beet sugar. Sugar growers hope the Senate follows suit.

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WASHINGTON — Millions have been spent on lobbying fees and campaign contributions in a fight over half a penny per pound of sugar.

And the expensive campaign over the nation's sugar program is far from over as the Senate prepares to debate the farm bill.

When the House approved its version of the bill this summer, sugar growers won a half-cent increase in the U.S. Department of Agriculture's price support loan rates.

The Sugar Policy Alliance was not happy. "This will make the unworkable sugar program even worse," the coalition that includes the nation's confectioners and cerealmakers said in a statement.

But sugar producers, who had hoped for a larger increase, a full cent or even two, were pleased with their gains. The loan rate guarantees the price of sugar does not drop below a certain level.

"The American sugar producers have been dealing with the same price of sugar for 20 years while input costs have increased dramatically," said Jim Simon, general manager of the Louisiana-based American Sugar Cane League.

The sugar growers' win was especially sweet since a powerful array of groups — ranging from candymakers like Hershey to the U.S. Chamber of Commerce — lobbied heavily for drastic reforms to the program. They wanted to replace the sugar loan program with a subsidy program that could help keep the price low.

The House also moved to blunt the impact of an expected flood of imported sugar from Mexico next year that will be allowed under the provisions of the North American Free Trade Agreement.

The House farm bill would divert those sugar imports to the production of ethanol, keeping it from depressing prices on the consumer market.

Christy Moran, spokeswoman for the Sugar Policy Alliance, attributed the sugar users' loss to the political clout of cane growers in Florida, Louisiana, Hawai'i and Texas and beet growers in the Midwest and West. Dozens of House and Senate members belong to congressional sugar caucuses. Hawai'i's sugar industry has steadily declined in recent decades with the value of production falling to $59 million in 2005 from a peak of $385 million in 1980.

The fight over the sugar program, which Federal Election Commission and lobbying disclosure reports show has cost millions, breaks out every five years, when Congress is required to reauthorize the farm bill.

The Senate could take up the 2007 farm bill later this month.

"We would encourage the Senate to use the House bill as a template," Simon said.

Meanwhile, sugar users and their Capitol Hill allies will try to reverse their House losses.

Sen. Dick Durbin, D-Ill., has said he wants to abolish the USDA sugar program. Several Illinois House members have argued that high U.S. sugar prices have cost the confectioner industry in Chicago thousands of jobs.

But Sens. Kent Conrad, D-N.D., and Norm Coleman, R-Minn., who sit on the Senate Agriculture Committee with Durbin and represent sugar beet growing areas, are expected to fight to protect the sugar program.

The White House has threatened to veto the final bill if farm subsidies are too high. That would leave the nation's sugar growers planting under current policy.

Under that policy, the USDA estimates total sugar consumption for the year, subtracts the amount of sugar the United States has agreed to import by quota, and mandates that domestic growers produce the rest. It also guarantees the price of that domestic production through a loan program.