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Strong U.S. Sugar Policy Essential for Integrated North American Sugar Market
The U.S. and Mexican sugar markets are now fully integrated and data sharing between the countries’ governments has improved since all trade barriers were lifted in 2008 under the North American Free Trade Agreement (NAFTA).
That’s according to David Berg, president and CEO of the American Crystal Sugar Company, who recently spoke at the annual Outlook Forum hosted by the U.S. Department of Agriculture (USDA).
Many global sugar markets have struggled with shortages since 2008, but the U.S. and Mexican markets have been adequately supplied, “which is a testament to government cooperation and strong sugar policies during the transition to full integration,” he said.
“But things could go wrong in the future unless cooperation continues to improve and sugar policies are kept strong,” Berg told the group.
Among the possible pitfalls he noted: unreliable market data from Mexico, which makes it harder for USDA to administer U.S. sugar policy; Mexico sending unlimited quantities to the U.S. then backfilling its market with subsidized foreign sugar imports; and unpredictable market swings in Mexico.
Congress included provisions in the 2008 Farm Bill to give USDA needed tools to deal with these pitfalls and avoid unforeseen market interruptions in the United States.
“Maintaining this sugar policy in the 2012 Farm Bill is imperative, especially if the North American markets move back to an oversupplied status as some analysts are predicting,” he explained.
U.S. policy has operated at no cost to taxpayers since 2002, and according to recent USDA projections, it should remain no cost through at least 2022.
Sugar, which is produced in 18 states, supports 142,000 U.S. jobs and contributes $20 billion to the economy each year.