Sweetener users battle sugar growers over reform
September 23, 2011 | 04:27 PM
Candy makers and other confectioners fanned out across Capitol Hill on Thursday, telling members of Congress that changing the U.S. sugar program is now their highest legislative priority.
The confectioners and other sweetener users have complained for years that the U.S. sugar program raises their costs, and have lobbied for changes each time the farm bill comes up. But the sugar growers’ lobby is strong, and Capitol Hill sources have said the users’ effort has often seemed half-hearted because the companies have considered other issues such as taxes and regulation a higher priority.
Larry Graham, president of the National Confectioners Association and chairman of the Coalition for Sugar Reform, said that has changed this year.
“Reforming U.S. sugar policy is the number one legislative issue for the National Confectioners Association and our members in advance of the 2012 farm bill,” Graham said in an email.
”The current policy places a huge burden on our members — especially our smaller members keeping them from investing and expanding in their communities and threatening jobs across the country,” Graham said. “That is why this issue is the number one focus and priority of this week’s Washington Forum.”
John Brooks Jr., a California candy maker who traveled to Washington for the lobbying effort, said the message they were taking to Congress was to “level the playing field.” Candymakers in other countries, Brooks said, can buy sugar at cheaper prices.
Brooks said he believes Congress will listen to the confectioners’ argument because “We are in an environment in which everybody is scrapping for jobs. We’ve got a federal policy that clearly demonstrates it costs jobs.”
He added that candymakers, bakers and others are also organizing efforts to talk to members in their home districts.
More than 650,000 people have jobs related to sugar food production while the sugar program benefits only 5,000 to 6,000 sugar growers, Brooks said. (The American Sugar Alliance, which represents the growers, says there are 10,000 to 11,000 growers and that a total of 142,000 people work in sugar growing, processing and transportation. )
Brooks’s firm, Adams & Brooks, was started by his grandfather, who sold caramel corn to people standing on the street waiting to go to the movies in 1932 and is credited with giving theater owners the idea of opening concession stands. The company went on to supply amusement parks with specialty candies, and also has distribution in many foreign countries.
Today Adams & Brooks has manufacturing operations in Los Angeles and Tijuana, Mexico, and is opening a facility in San Bernardino. Brooks says his company is “a big little company” that “has ingenuity and drive to overcome and navigate anything if we’re all on the same level playing field.”
Brooks said he opened the Tijuana facility because the price of sugar is cheaper in Mexico. U.S. sugar growers have suggested that candy companies moved to Mexico because labor costs are lower, but Brooks rejected that argument. He said it would not pay to set up in Mexico just to save labor costs because his production his highly mechanized. Brooks said the price of sugar in Mexico has been 10 to 15 cents per pound cheaper, although he could not say exactly what the price difference is now. “Mexico also has its political environment,” he noted.
Noting that other candy companies have gone out of business or moved operations overseas, Brooks said he feels grateful his company has survived and that it bothers him to see candy made by “a sloppy operator in another country.”
Due to a combination of weather problems and increased demand, the U.S. floor price for sugar is now way below the world price, which raises the question of why candymakers even care about it.
U.S. sugar growers have also argued that the current program makes sure that domestic growers make enough money to ensure they supply most U.S. sugar.
The European Union reduced its floor price, which resulted in lower domestic production and some developing countries not delivering the sugar at the lower price. European sugar officials say the reform has caused shortages, volatility and high prices, but Brooks dismissed that concern, saying “Why don’t they offer to buy it for more?”
While several members of Congress have introduced bills to end or change the sugar program, the confectioners and other sweetener users have not said specifically what they want changed in the program. Brooks said the real issue is the restrictions that the sugar provision in the 2008 farm bill put on imports.
“There are only narrow windows when USDA is free to consider” imports, he noted. “It would be very beneficial to have the market decide what the price is — not some bureaucrat making an estimate on where the price will go.”
While sugar growers point out that the sugar program is operated at no cost to taxpayers, Brooks said that the higher prices “cost all Americans.”
But apparently there are limits to the attractiveness of operating in Mexico.
Asked why he is opening a factory in San Bernardino rather than expanding his operations in Tijuana, Brooks asked, “Do you want to live in Tijuana?”
He added, “Our opening and investing in San Bernardino cannot and should not be interpreted as an acceptance that sugar policy is OK. There’s always future decisions.”
The confectioners and other sweetener users have complained for years that the U.S. sugar program raises their costs, and have lobbied for changes each time the farm bill comes up. But the sugar growers’ lobby is strong, and Capitol Hill sources have said the users’ effort has often seemed half-hearted because the companies have considered other issues such as taxes and regulation a higher priority.
Larry Graham, president of the National Confectioners Association and chairman of the Coalition for Sugar Reform, said that has changed this year.
“Reforming U.S. sugar policy is the number one legislative issue for the National Confectioners Association and our members in advance of the 2012 farm bill,” Graham said in an email.
”The current policy places a huge burden on our members — especially our smaller members keeping them from investing and expanding in their communities and threatening jobs across the country,” Graham said. “That is why this issue is the number one focus and priority of this week’s Washington Forum.”
John Brooks Jr., a California candy maker who traveled to Washington for the lobbying effort, said the message they were taking to Congress was to “level the playing field.” Candymakers in other countries, Brooks said, can buy sugar at cheaper prices.
Brooks said he believes Congress will listen to the confectioners’ argument because “We are in an environment in which everybody is scrapping for jobs. We’ve got a federal policy that clearly demonstrates it costs jobs.”
He added that candymakers, bakers and others are also organizing efforts to talk to members in their home districts.
More than 650,000 people have jobs related to sugar food production while the sugar program benefits only 5,000 to 6,000 sugar growers, Brooks said. (The American Sugar Alliance, which represents the growers, says there are 10,000 to 11,000 growers and that a total of 142,000 people work in sugar growing, processing and transportation. )
Brooks’s firm, Adams & Brooks, was started by his grandfather, who sold caramel corn to people standing on the street waiting to go to the movies in 1932 and is credited with giving theater owners the idea of opening concession stands. The company went on to supply amusement parks with specialty candies, and also has distribution in many foreign countries.
Today Adams & Brooks has manufacturing operations in Los Angeles and Tijuana, Mexico, and is opening a facility in San Bernardino. Brooks says his company is “a big little company” that “has ingenuity and drive to overcome and navigate anything if we’re all on the same level playing field.”
Brooks said he opened the Tijuana facility because the price of sugar is cheaper in Mexico. U.S. sugar growers have suggested that candy companies moved to Mexico because labor costs are lower, but Brooks rejected that argument. He said it would not pay to set up in Mexico just to save labor costs because his production his highly mechanized. Brooks said the price of sugar in Mexico has been 10 to 15 cents per pound cheaper, although he could not say exactly what the price difference is now. “Mexico also has its political environment,” he noted.
Noting that other candy companies have gone out of business or moved operations overseas, Brooks said he feels grateful his company has survived and that it bothers him to see candy made by “a sloppy operator in another country.”
Due to a combination of weather problems and increased demand, the U.S. floor price for sugar is now way below the world price, which raises the question of why candymakers even care about it.
U.S. sugar growers have also argued that the current program makes sure that domestic growers make enough money to ensure they supply most U.S. sugar.
The European Union reduced its floor price, which resulted in lower domestic production and some developing countries not delivering the sugar at the lower price. European sugar officials say the reform has caused shortages, volatility and high prices, but Brooks dismissed that concern, saying “Why don’t they offer to buy it for more?”
While several members of Congress have introduced bills to end or change the sugar program, the confectioners and other sweetener users have not said specifically what they want changed in the program. Brooks said the real issue is the restrictions that the sugar provision in the 2008 farm bill put on imports.
“There are only narrow windows when USDA is free to consider” imports, he noted. “It would be very beneficial to have the market decide what the price is — not some bureaucrat making an estimate on where the price will go.”
While sugar growers point out that the sugar program is operated at no cost to taxpayers, Brooks said that the higher prices “cost all Americans.”
But apparently there are limits to the attractiveness of operating in Mexico.
Asked why he is opening a factory in San Bernardino rather than expanding his operations in Tijuana, Brooks asked, “Do you want to live in Tijuana?”
He added, “Our opening and investing in San Bernardino cannot and should not be interpreted as an acceptance that sugar policy is OK. There’s always future decisions.”