Public Hearing on 2002 Crop Allotments for Beet and Cane Sugar

United States Department of Agriculture

On behalf of Citizens Against Government Waste (CAGW) and its one million members and supporters, I thank you for the opportunity to testify on the subject of the U.S. Department of Agriculture’s 2002 crop allotment quantities for beet and cane sugar.

CAGW is a nonprofit, nonpartisan organization, which grew out of President Reagan’s Private Sector Survey on Cost Control, better known as the Grace Commission.  The organization’s mission is to work for the elimination of waste, mismanagement, and inefficiency in the federal government, with the goal of creating a government that manages its programs with the same eye to innovation, productivity, and economy that is dictated by the private sector.  The Center for International Food and Agriculture Policy institutionalized CAGW’s long-standing goal of dismantling Depression-era agricultural price supports and regulations.

While CAGW is a member of the Coalition for Sugar Reform, CAGW has long supported elimination of the archaic sugar program without regard to the coalition’s position.  CAGW is also aware that the failure to accomplish greater reform of this program lies with Congress and is not the subject of this hearing.  We also believe that the institution of marketing allotments, which represents a return to the failed policies of supply control, makes a bad public policy even worse.  Again, however, we understand that Congress is primarily responsible for the regressive farm legislation passed earlier this year.

Having acknowledged that Congress is the real culprit in adopting bad farm policy, it is also clear that USDA is making this already worse policy worse still by failing to implement it in a fair and equitable manner.  In fact, it is being implemented in a manner that will ensure that it imposes a de facto sugar tax on American consumers.

We concur with the observations made by other witnesses that question USDA’s determination of what is a “reasonable” level of ending stocks, for purposes of establishing the tariff rate quota, under the statutory requirement.  USDA has set this level drastically lower than where it was over at least the last six years with no justification for this determination.

It is clear to CAGW that USDA is intentionally creating a tight sugar supply situation which is designed to drive up food prices for the sole benefit of sugar growers and processors.  USDA’s action will drive up the cost of sugar without regard to its impact on consumers, the food manufacturing industry, or the communities and jobs that it supports.

In conclusion, CAGW agrees with those who propose that USDA should immediately increase the 2002/2003 overall allotment quantity to a more reasonable level by making a more realistic estimate of reasonable ending stocks.  We concur in the position that a stocks target of 15.5 percent to 16.5 percent would more closely reflect the realities of the market.  USDA must correct its unjustified and harmful determination immediately.