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House panel rebuffs candy makers, stands by sugar program

July 11, 2012|By Kim Geiger
(Katie Falkenberg / For The…)

WASHINGTON -- An effort by food and beverage makers to gut a federal program that protects domestic sugar producers from foreign competition was roundly defeated Wednesday in the House Agriculture Committee.

By a vote of 36 to 10, the committee opposed an amendment to the 2012 farm bill that would have allowed more imports of foreign sugar, making it less expensive for food and beverage companies to buy the ingredient. 

A similar amendment was narrowly defeated in the Senate when that chamber passed its farm bill last month. The food industry had hoped for better luck in the House.

Vowing to “redouble” its efforts on Capitol Hill, the Coalition for Sugar Reform, a group of trade associations representing food, beverage and candy makers, as well as the U.S. Chamber of Commerce and the libertarian-minded Club for Growth, said in a statement that “the fight for sugar reform is far from over.”

Under the current program, at least 85% of sugar sold in the U.S. must be produced here. The program guarantees minimum sugar prices for domestic producers through federal loans that allow producers to borrow against their supplies and repay those loans in sugar, instead of cash, if prices drop too low.

The Coalition for Sugar Reform argued that the program costs consumers as much as $3.5 billion a year in higher food prices and that doing away with it could produce as many as 20,000 food manufacturing jobs. Club for Growth calls the program “an outrageous form of corporate welfare.”

Sugar producers contend that the program protects a $20-billion industry, which employs 142,000 workers nationwide. And they doubt that food makers would pass along any savings that might come from doing away with the program.

"At the end of the day ... if the sugar prices came down, it wouldn't change the price of a candy bar," said Rep. Colin Peterson, a Minnesota Democrat whose state is home to sugar beet farms and processors.

The failed amendment, offered by Rep. Robert Goodlatte (R-Va.), was one of a number of proposed changes to a draft farm bill under consideration Wednesday by the House Agriculture Committee.

Farm bill disputes are typically drawn along geographic, rather than ideological, lines. But the bill contains $16 billion in cuts to food stamps that have angered Democrats and billions of dollars in subsidies that irritate conservative Republicans, making it unlikely that the bill will make it to the House floor before the November election.

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