Paula Frank

Alarm bells are sounding once again for food manufacturers who use sugar as an ingredient in their formulations. The United States will end the next fiscal year with less than 13 days worth of sugar on hand according to the USDA's World Agricultural Supply and Demand Estimates. In response to the looming crisis, the Sugar Policy Alliance held a meeting August 3 to discuss strategies to increase supply. On September 9, the alliance will be holding a House Sugar Reform Caucus on Capitol Hill to address potential impacts of the sugar shortage and discuss potential reforms to U.S. sugar policy.

In a letter to Agriculture Secretary Vilsack, members of the Sugar Alliance, as well as sweetener users, such as Hershey Co., Kraft Foods Inc., Sara Lee Corp. and Krispy Kreme, urged for an increase in the sugar import quota. According to the letter, the only reason markets are forecast to be so tight is the restrictive U.S. policy on sugar imports. Without a quota increase, consumers will pay higher prices, food-manufacturing jobs will be at risk and trading patterns will be distorted.

Sadly, it isn't as if government control and manipulation of sugar imports and prices is a new phenomenon. The U.S. government has reportedly pushed American sugar prices above world market prices since the end of the War of 1812. Here we are a couple of centuries later facing not only a supply shortage, but potentially astronomical prices. Granted, the issues surrounding sugar policy are far more complex today than they were in the 1800s.

Today, sugar import quotas are affected by the diversion of crops to ethanol production, foreign tariffs, increasing demand and foreign aid programs. But, one of the most significant factors affecting sugar import quotas is the government protectionist net supplied to farmers.

According to the Wall Street Journal, the Agriculture Department released a statement indicating it will “continue to review market conditions to ensure…an appropriate safety net for growers” as well as “a stable supply environment.”

In other words, concessions may be made to whoever has the loudest voice in Washington, which is why lobbying efforts on behalf of the baking industry are so crucial.

Baking industry associations encouraged bakers to sign the letter to Secretary Vilsack, imploring him to “act now in the interest of all Americans.” If our elected and appointed officials would only listen to their constituents!