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International Sugar Trade Coalition www.sugarcoalition.org. U.S. sugar policy: an exporter perspective. Presentation to the Farm Foundation conference on Domestic and Trade Impacts of U.S. Farm Policy: Future Directions and Challenges November 15, 2007 Washington, D.C.

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International Sugar Trade Coalition

www.sugarcoalition.org

U.S. sugar policy: an exporterperspective

  • Presentation to the Farm Foundation conference on

  • Domestic and Trade Impacts of U.S. Farm Policy:

  • Future Directions and Challenges

  • November 15, 2007

  • Washington, D.C.


International Sugar Trade Coalition

www.sugarcoalition.org

ISTC membership


International Sugar Trade Coalition

www.sugarcoalition.org

ISTC at a glance

Population: 163 million

GDP per capita: $1,400 (USA: $44,153)

Sugar production: 6.3 million tons (all cane)

  • 11% of agriculture

  • 1% of GDP (4x more than corn to US)


International Sugar Trade Coalition

www.sugarcoalition.org

US sugar program

High prices

Minimum levels of access for imports

Exporters share the benefits

US major sugar producer, importer


1789: revenue tariff

1890: beet sugar subsidy

1894: protective tariff

1934, 1937, 1948: price supports, domestic and import quotas

1977, 1979: crop support

1981, 1985, 1990, 1996, 2002: current sugar program

International Sugar Trade Coalition

www.sugarcoalition.org

US sugar legislation


International Sugar Trade Coalition

www.sugarcoalition.org

How it works

Goal: price above loan rate

- loan rate = 18¢ per lb. for raw cane sugar

- producers can forfeit their sugar and keep the loan if the price is too low


International Sugar Trade Coalition

www.sugarcoalition.org

How it works

  • Goal: price above loan rate

  • - loan rate = 18¢ per lb. for raw cane sugar

  • No cost to the government

  • - supply management

  • - import quotas


International Sugar Trade Coalition

www.sugarcoalition.org

Import share


International Sugar Trade Coalition

www.sugarcoalition.org

How it works

  • Goal: price above loan rate

  • - loan rate = 18¢ per lb. for raw cane sugar

  • No cost to the government

  • - supply management

  • - import quotas: minimum level


International Sugar Trade Coalition

www.sugarcoalition.org

Forty quota holders

Italics denote ISTC member


International Sugar Trade Coalition

www.sugarcoalition.org

How it works

  • Goal: price above loan rate

  • - loan rate = 18¢ per lb. for raw cane sugar

  • No cost to the government

  • - supply management

  • - import quotas: minimum level

  • - domestic marketing allotments


International Sugar Trade Coalition

www.sugarcoalition.org

How it works

  • Goal: price above loan rate

  • - loan rate = 18¢ per lb. for raw cane sugar

  • No cost to the government

  • - supply management

  • - import quotas: minimum level

  • - no controls on Mexico as of Jan. 1

  • - domestic marketing allotments

  • - 85% share sought in Farm Bill


International Sugar Trade Coalition

www.sugarcoalition.org

Value ranges for raw sugar, FY 2000 - FY 2005


International Sugar Trade Coalition

www.sugarcoalition.org

Value ranges for raw sugar, FY 2000 - FY 2005


International Sugar Trade Coalition

www.sugarcoalition.org

Value ranges for raw sugar, FY 2000 - FY 2005


International Sugar Trade Coalition

www.sugarcoalition.org

Value ranges for raw sugar, FY 2000 - FY 2005

Sell a little at a profit? Or a lot at a loss?


International Sugar Trade Coalition

www.sugarcoalition.org

Value ranges for raw sugar, FY 2000 - FY 2005

* 2004, wholesale (LMC International)


PRESS RELEASE

ACP countries express deep concern at EU Decision to terminate ACP-EU Sugar Protocol

Brussels, 28 September 2007 – African, Caribbean and Pacific (ACP) sugar producing countries today expressed their deep concern and outrage at the European Union’s (EU) decision to terminate unilaterally the long standing Sugar Protocol, which provides preferential access to the EU market for imports of ACP sugar....

The recent reform of the EU sugar regime will result in permanent losses of c. €250 million per year for these countries, where in some cases sugar contributes up to 20% of GDP....

International Sugar Trade Coalition

www.sugarcoalition.org

Impact of EU sugar reform


1.3 workers per hectare per year

392,000 hectares of sugarcane

509,000 workers in the field

wages: about $4.00 a day

With mills, refineries, etc. = 600,000 jobs

42,000 jobs to serve US market

International Sugar Trade Coalition

www.sugarcoalition.org

Sugar employment - Philippines


International Sugar Trade Coalition

www.sugarcoalition.org

Farm size - Philippines


International Sugar Trade Coalition

www.sugarcoalition.org

Average farm size - Philippines and Brazil


House

Raises loan rate 1/2¢ per lb.

Reserves up to 85% of market for domestic sugar

Creates ethanol program

Senate

Raises loan rate 1¢ per lb. over 5 years

Reserves up to 85% of market for domestic sugar

Creates ethanol program

International Sugar Trade Coalition

www.sugarcoalition.org

2007 Farm Bill


International Sugar Trade Coalition

www.sugarcoalition.org

2007 Farm Bill

  • US sugar program: a stable and remunerative market for developing countries


International Sugar Trade Coalition

www.sugarcoalition.org

Sources

  • Slide 3: ISTC population and GDP from World Bank (Atlas method); sugar production from national data.

  • Slide 9: Import share of US market from USDA, Farm Service Agency, Sweetener Market Data.

  • Slides 13-16: cost of production from Owen Wagner, “The US Sugar Program: Reform Pressures and Options,” paper delivered at International Food Policy Research Institute conference on Global Sugar Markets, June 1, 2007; world and US prices from USDA, Sugar and Sweeteners Outlook SSS-250, September 27, 2007; world domestic wholesale price from LMC International survey, “Retail and Wholesale Prices of Sugar around the World in 2004,” July, 2005.

  • Slides 19-20: Data supplied by Philippine Sugar Millers Association.

  • Slide 21: Data from Conselho dos Produtores de Cana-de-Açucar e de Alcool (Consecana) and Organização de Plantadores de Cana da Região Centro Sul do Brasil (Orplana).


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