(Bloomberg) -- The U.S. House may deliver a significant victory for candy-makers this week in a decades-long quest to end sugar price supports.
Representative Virginia Foxx, a North Carolina Republican, said Monday she has the votes to pass an amendment that would eliminate production limits that keep sugar prices higher for growers.
The House Rules Committee will meet Wednesday to decide what amendments may be voted on as part of the farm bill, an $867 billion, twice-a-decade reauthorization of all U.S. Department of Agriculture initiatives. A full House vote on the measure is set for Friday. Lawmakers who want to revise sugar policies are facing up against the biggest-spending farmer lobby in Washington.
"I am a believer in free markets. Republicans should all believe in free markets. Some do more than others," Foxx said. "I do not believe in allotments. All the other programs like this have gone away. Sugar is the last one."
By managing supply levels, in most years the sugar program has no direct taxpayer cost, though in 2013 a glut cost the government $259 million to buy surplus sugar it sold at a loss. A 2017 analysis by the American Enterprise Institute, which opposes the program, estimated that consumers and users may spend up to $4 billion annually in extra costs because of higher commodity expenses.
Foxx’s amendment also would repeal a sugar-to-ethanol program that let the government sell surplus sweetener to biofuels producers, and it would give the administration greater flexibility to lower tariffs on imported sugar. It wouldn’t require sugar processors to reimburse the government for costs incurred under a federal loan program, a key difference between the amendment and an earlier stand-alone bill sponsored by Foxx.
Her plan appeals to Republicans interested in moving U.S. farm policy away from government intervention, and also to trade groups representing companies that use sweeteners, including Coca-Cola Co. and Kellogg Co. Supporters say her plan would relieve processors of higher costs and reduce consumer prices.
Opposing the move, the latest in a long line of attempted changes to sugar programs, are sugar producers and lawmakers from Great Plains and Deep South states that produce almost all beet and cane sugar in the U.S. They say the change would amount to unilateral disarmament in the global sugar economy, allowing heavily subsidized foreign producers to dump products on the U.S. market and destroy the domestic industry. They also contend that claims of inflated costs for consumers are exaggerated.
The sugar sector has political clout. Nine of the top 12 donors to congressional campaigns among farm groups this election cycle are sugar-related, according to finance data analyzed by the Center for Responsive Politics in Washington. The Fanjul family, owner of sugar brands including Domino Foods Inc., is a longtime Republican donor and supporter of lawmakers including GOP Senator Marco Rubio of Florida, the top grower of sugar cane.
Republican Representative Ted Yoho of Florida is leading the fight against Foxx’s amendment, even though he’s a member of the conservative House Freedom Caucus, which is skeptical of government aid. Yoho said Monday he favors ending all farm subsidies but only if trading partners do the same.
‘A Lot of Misinformation’
“There’s a lot of misinformation out there" spread by environmentalists and confectioners that claim the program costs consumers and taxpayers money, when in reality its impact is negligible, Yoho said.
"This has not cost the taxpayer except in 2013, when Mexico took Brazilian sugar and dumped it on our market,” he said. “I’ve never had anyone come up to me and say, can you do something about the price of sugar?”
House Agriculture Chairman Mike Conaway said Tuesday that the proposed sugar amendment “is the most troubling one” out of more than 100 proposed changes to the farm bill. He said major corporations are trying to destroy sugar farmers.
Conaway of Texas said that allowing an “attack” on one farm program would jeopardize all farm supports. “We are going to fight on behalf of sugar,” he said.
House passage of the amendment wouldn’t necessarily mean it will become law.
A top Senate critic of the sugar program, Democrat Jeanne Shaheen of New Hampshire, said she’ll make a similar attempt to amend the Senate version of the farm bill, but it will be an uphill climb.
“It would be a challenge over here due to the position of leadership," because Democratic leaders back the program, Shaheen said.
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