Bipartisan effort to repeal sugar protection heats up as Crystal Sugar lockout continues

A bill recently introduced by congressmen from Pennsylvania and Illinois could have a far-reaching impact on the U.S. sugar industry, including American Crystal Sugar, a farmer-owned cooperative that locked out 1,300 union workers on Aug. 1.

Source: Gfpeck, Flickr

Members of Minnesota and North Dakota’s congressional delegations have repeatedly warned that the company’s lockout could help undermine the congressional consensus around protections for the sugar industry.

“There are members of Congress whose natural constituency is agriculture; some who see themselves as champions of business, and others who fight for workers,” Sen. Al Franken wrote in late August. “Knowing that the program has worked so well for so many years for the hardworking growers who produce such a large percentage of our nation’s sugar beets and for the dedicated workers and skilled management, who turn those beets into the highest quality sugar in the world, has played no small role in creating this consensus.”

Big Sugar has maintained support from Congress by continuously lining the campaign coffers of both Republicans and Democrats, although there is also a tangible discontent among industries that use sugar products, who find domestic prices to be too high. Those upset with American Crystal Sugar’s labor practices could join with these discontented industries to repeal the protections.

Enter Rep. Joe Pitts, R-Penn., and Danny Davis, D-Ill., who teamed up to introduce a bill that would protect the other sweet-tooth industries: candy companies that lie within their districts.

“We’ve heard from his constituents that the price of sugar is affecting business, it’s affecting jobs,” says Pitts spokesperson Andrew Wimer, who adds that Davis, the Chicago Democrat co-sponsoring the legislation, cites examples of factories that have shut their doors because of the high price of sugar.

The Free Market Sugar Act would repeal the sugar loan program and amend the Farm Security and Rural Investment Act (known as the Farm Bill), perhaps the most important piece of legislation impacting U.S. sugar interests. Written every five years, the Farm Bill helps sugar growers with farm subsidies (which some dismiss as “corporate welfare”) and a series of quotas that tightly control the supply of imported sugar, a benefit to the handful of American sugar producers who pocket around $1 billion in excess profits a year, and a detriment to candy companies that buy U.S. sugar at prices two to three times higher than the global market rate.

Federal legislation also calls for the sugar program to be operated on a no-cost basis, a provision some sugar insiders project will remain for years to come.

“In general, [the Free Market Sugar Act] seeks to reform the sugar program so that the government is not controlling how much sugar is produced and imported,” says Wimer. ”It loosens the controls on production and importation, so that the U.S. price for sugar can be more closely aligned with the world price.”

In addition to amending the sugar price support program, the bill pushes for more transparency in the sugar industry, and an overhaul of how it does business. If enacted, the bill would replace quota import provisions with a tariff rate quota. “Right now the USDA is tightly controlling how much raw cane sugar comes into the U.S.,” says Wimer. “Instead of blanket eliminating quotas, we are modifying it so it’s not as unfair to the current market.”

Pitts and Davis have also recently announced the formation of the Congressional Sugar Reform Caucus, a bipartisan group that also includes Sens. Mark Kirk, R-Ill., and Jean Shaheen, D-N.H.