SAN DIEGO, Aug. 7, 2017 – The leaders of the two biggest U.S. farm groups opened the sugar industry’s annual Sweetener Symposium Monday with a plea for unity among ag organizations as Congress gets down to negotiating a new farm bill.
Zippy Duvall, president of the American Farm Bureau Federation (pictured above), told the American Sugar Alliance gathering in San Diego that the tough economic conditions farmers are facing make it obvious that a strong safety net is needed to ensure agriculture producers can plant and harvest a crop from one year to the next.
“If we’re gonna write a farm bill, we couldn’t find a better atmosphere to write it in,” said Duvall, who said a more precise term for the legislation Congress puts together every five years or so should be a “food security bill for the people of America.”
“It’s not a safety net for farmers,” Duvall said. “It’s not a pay check we’re gonna receive… It’s to make sure farmers get through this crop and can get to the next one…”
Duvall also said that this is the right time to negotiate the farm bill because President Trump “talks our language” and has put in place a team that understands farmers and can speak for the sector to congressional negotiators. He specifically praised Agriculture Secretary Sonny Perdue, Interior Secretary Ryan Zinke and EPA chief Scott Pruitt.
Pruitt, he said, had spoken twice before AFBF leaders and each time had received a standing ovation. “Who would ever think an EPA administrator would ever get a standing ovation from a group of Farm Bureau leaders… I never thought that would happen…. He (Pruitt) wants to go back and enforce laws as they were intended, not make up rules.”
Duvall had followed Roger Johnson, the president of the National Farmers Union, who said farmers, ranchers, conservation groups and nutrition organizations “will all have to be pulling together to get the farm bill done.”
He noted that the ag sector is being challenged by groups including the Heritage Foundation and tea party activists who will be looking for cuts in farm spending, and specifically from nutrition programs, which account for most of USDA outlays.
“When you have a knife out to cut, you go where the money is,” Johnson said.
Still, Johnson said he’s optimistic that the farm bill will be finished on time and that the end result will be “evolutionary, not revolutionary.” He said with Congress as divided as it is now, a farm bill may be an “easier lift” than other legislation being debated, and that lawmakers may see the measure as a way to demonstrate they can get things done.
Later, in a separate panel discussion, Jack Roney, an ASA economist, called for a continuation of a strong U.S. sugar policy in the 2018 farm bill, arguing that with U.S. sugar prices still slumping, the country would otherwise be vulnerable to losing much of its domestic sugar industry.
“Sugar is a unique commodity and our policy is unique in that it is designed to operate without taxpayer cost,” he said. Roney pointed out that U.S. sugar growers don’t have access to farm programs such as Agriculture Risk Coverage and Price Loss Coverage, which are designed to provide financial relief to other commodity groups when prices fall below certain levels. Sugar producers, on the other hand, put their crops up as collateral for loans designed to help them maintain their businesses throughout the year. Because loans are repaid with interest and no subsidy checks are involved, sugar policy has generally been without cost to taxpayers.
“After a sugar crop is completed, producers must hold the inventory until food makers buy it and ultimately need the sugar in their factories,” Roney said. “This keeps our customers from having to store massive quantities of sugar. That kind of just-in-time delivery would be nearly impossible without the cash-flow that government loans provide.”
Roney says there would be other consequences, too, if opponents of sugar policy are successful in gutting the loan system in the next farm bill.
“In today’s low-price environment, you’d see many domestic producers go out of business without a strong safety net – much like the century-old Hawaiian industry that recently went under after years of market uncertainty,” he explained. “Risk would increase, contraction would occur, and geographic diversity of the industry would shrink.”
That would also mean a greater dependence on subsidized imports, according to Roney.
“As we’ve seen in other countries that’ve outsourced sugar production, grocery shoppers would be vulnerable to market fluctuations and supply issues,” he concluded. “A reliable, affordable, homegrown sugar supply is in the public interest, and no-cost sugar policy makes it all possible.”
Speaking on the same panel was Randy Green, representing the Sweetener Users Association, who argued that U.S. sugar policy keeps prices artificially high for the companies that use large amounts of sugar, and ultimately for U.S. consumers.
The 34th Annual Sweetener Symposium continues through Wednesday. House Agriculture Committee Chairman Mike Conaway, R-Texas, addresses the group on Tuesday, and the panel’s ranking Democrat, Collin Peterson of Minnesota, is scheduled to speak Wednesday.
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