The document discusses perspectives on the US sugar program from various sectors including public health, agriculture, food industry, and trade. There are opposing views on whether the sugar program's price supports and import restrictions are beneficial or detrimental. Public health experts argue higher sugar prices from the program may help reduce obesity rates but also encourage use of high fructose corn syrup. Sugar farmers benefit but consumers and food companies pay higher prices. Reforming the program poses challenges given diverse stakeholder interests.

1. US Sugar Program through diverse perspectives
The US Farm Bill is one of the most discussed acts in US agriculture and trade. USDA’s
secretary of agriculture Tom Vilsack states that the Farm Bill influences various sectors such as
food, farm, conservation, trade, research, and energy policies.(1) Among various policies and
programs the farm bill determines, the US sugar program is one of the most debates ones. The
sugar program is controversial because it has implications on various sectors like sugar
producers, sugar processors, sugar product manufacturers, sugar consumers, public health, and
international trade. Sugar is one of the commodities protected by the Farm Bill through loan
programs and guaranteed market prices. (2) USDA uses various tools authorized by the 2008
farm bill to keep domestic sugar prices at guaranteed levels. They are price guarantees,
marketing allotments for the amount of sugar that can be sold by each producer, import quotas to
restrict imports, and sugar-to-ethanol backdrop, which basically means that the extra corn
produced (intended for corn syrup production) can be used for ethanol production. The import
quotas and tariffs on imported sugar are used with the rationale of protecting the domestic sugar
industry. (3) For the 2014 Farm Bill, the Senate committee on Agriculture, Nutrition, and
Forestry has stated that there are no changes in sugar program till 2018. (4) The debate around
whether the government should protect sugar through loan programs and domestic market
protection has come into light before every farm bill due to conflicting ideas and views from
different sectors affected by the sugar program.
There are two main sides to the sugar program debate. The first one generally implies that the
US government should stop protecting domestic sugar industry and reform the sugar program.
The second one says that the sugar program is beneficial to the domestic sugar industry and the
US government should keep protecting sugar commodity. Various organizations have their own

2. ideas on which of these sides to support and there is a constant debate about the pros and cons of
the US sugar program. This paper examines the pros and cons of the sugar program from
different perspective across sectors. In addition, this paper will make a recommendation on
whether the US sugar policy in the farm bill is beneficial or detrimental based on evidence
supporting each case.
Nutrition and Public Health Perspective
The public health and nutrition sector is primarily concerned with the role of sugar consumption
in unhealthy weight gain, cardiovascular diseases, and cancer. The CDC’s self-reported obesity
prevalence map of 2013 shows that all the states in the US have the prevalence of obesity above
20% with many states having prevalence above 30%. (5) Nutritionists and public health
professionals argue that the rise of obesity prevalence is due to the consumption of sugary food
and beverages among other environmental and social factors. Half of all the Americans adults
and most of the adolescents consume sugar sweetened soft drinks daily and sugar sweetened
beverage consumption happens to be an important contributory factor in causing excessive body
weight and obesity. (6)(7) Evidence also suggests sugar may be associated with various forms of
cancer such as pancreatic cancer and colon cancer. (8)(9) Similarly, excess sugar consumption
has also been linked with cardiovascular problems like high blood pressure,
hypertriglyceridemia, and low HDL. (10)
With evidence supporting the adverse effects of sugar consumption on human health,
professionals in health and nutrition organizations are strongly in favor of adopting measures
such as taxation of sugary soft drinks to discourage consumption and consequently reduce
obesity, CVD, cancer, and other diseases associated with the excessive consumption of sugar.

3. The American Medical Association argues that taxes on sugar sweetened beverages are one
means of sponsoring consumer education campaigns and obesity-related programs to combat the
obesity epidemic and treat/prevent the obesity related conditions. (11) Similarly, Institute of
Medicine of the National Academics suggests adopting a tax strategy that discourages the
consumption of food and beverages that have minimal nutritional values like sugar sweetened
beverages.(12) Other institutions like American Cancer Society and American Heart Association
recommend further research on examining effects of sugar taxation policy to public health and
consumption of sugar.
The current body of literature suggests that the public health and nutrition sector opposes the
influence of the sugar industry in food production and manufacturing. The major concern of this
sector is the rising costs of health expenditures due to obesity, CVD, cancer, and other diseases
which directly have an association with the consumption of sugary food and beverages. Most
people in this sector believe that sugar policy of guaranteed prices and sugar as a collateral is
encouraging farmers to produce more sugars rather than other food crops and vegetables. As
sugar is a major contributing factor to obesity and overweight, many believe the focus should lie
more on limiting production of sugar and limiting the amount of added sugar in foods rather than
encouraging food producers and processors to make more sugar. The literature suggests that
organizations concerned with public health and nutrition are in favor of raising taxes among the
sugary foods and beverages to discourage consumption; and, reducing incentives among the
farmers for sugar production.
However, it is still not clear whether modifying or eliminating the sugar policy will address any
of the primary concerns of the public health and nutrition sectors. This is because eliminating
import quotas on sugar will result in importing sugar at a lower price than the current price. This

4. elimination of quotas will result in lower price of sugary food and beverages, which may further
encourage the consumption of these items. This may further exacerbate the problem of obesity,
CVD, and other related diseases with increased sugar consumption.
Agriculture and Food Industry Perspective
US sugar program is one of the most supported programs in the agricultural sector. The US
government is protecting and controlling sugar production and marketing in different ways. First,
the federal government guarantees price support loans at which it will purchase sugar from the
farmers at a higher rate than the world prices. Next, the government sets limits of how much
sugar each manufacturer can sell in a year. Finally, the government has an import quota that
restricts the amount of sugar that enters the US market. (13)
The price support loan gives the sugar processors (not the sugar producers) an option get a
nonrecourse loan for low cost financing until the processor sells the sugar. It also gives the
processors the option to forfeit sugar as collateral if the market price of sugar falls below certain
price. The federal government also sets limits on how much sugar processors can sell each year
through allotments. Every year the USDA sets an overall allotment quantity (OAQ) at not less
than 85% of human sugar consumption for food. (13) The Import Quota in the sugar program is
mostly driven by commitment of US government to World Trade Organization (WTO) which
states the US has to allow no less than 1.256 million tons of sugar into the domestic market.
Besides, US has to allow smaller import quotas to various Central American countries based on
various free trade agreements.
The proponents in favor of the sugar program state that this loan support does not cost the federal
government and the taxpayers any money and is beneficial in protecting the domestic sugar

5. industry. The support for this policy comes from American Sugar Alliance (ASA), which
represents sugar producers and processors. ASA states that the sugar program ensures supply of
high quality, responsibly produced sugar at a reasonable price to the consumers along with zero
cost to American taxpayers. Other major farming associations have also voiced in favor of sugar
program.(14)
However, opponents of sugar program in agricultural economics and nutrition argue that there is
a severe economic consequences as the consumers are being forced to pay higher prices for sugar
and sugar related foods due to the higher market price set by the government. (15) Furthermore,
the sugar subsidy is favorable to only a limited number of large sugar processing industries as
there are a few major producers in the US. Thus, the program is unfairly protecting them from
competition by imposing import quotas and production restriction. According to a study by John
Beghin and Amani Elobeid of Iowa State University, the sugar program costs consumers about
$3.5 billion each year through higher prices and has reduced employment by more than 127,000
jobs since 1997. (15) The manufacturers of the sugar- containing foods and beverages are
strongly in favor of changing the current sugar program in the farm bill. Coalition for Sugar
Reform (CRS), which represents sugar using food and beverage companies, argue that the US
sugar program leads to higher sugar prices than anywhere else in the world and results in
consumers paying higher prices for sugar containing foods and beverages. Moreover, the sugar
program is encouraging food manufacturers to relocate food processing jobs elsewhere and
reducing US jobs. (14)
There is clear evidence of the opposing opinions on the US sugar program across the agricultural
industry sector. Sugar producers and processors are clearly in favor of the current sugar program
whereas sugar using food and beverage manufacturers are proposing several amendments to the

6. current program to reduce the sugar prices. Considering the benefits of low sugar prices for the
consumers, an amendment to change the sugar program seems a good argument. However, sugar
producers and processors will clearly oppose any changes that aim to reduce the prices of raw
sugar. Furthermore, one can always argue that lower sugar prices is beneficial to consumers
economically, but can be detrimental to public health as low prices might lead to more
consumption. Determining the future policy course for the sugar program will be a challenge in
which one of the two proponent group will have to make a compromise.
US Trade Perspective
US sugar program is highly inconsistent with the current trade policies that US has signed with
countries like Mexico and Brazil. One such inconsistency is easily seen with sugar trade
relationship between US and Mexico. The North American Free Trade Agreement (NAFTA)
took effect in 1994, but US sugar market was protected from imported Mexican sugar through
tariff quotas until 2008. (16) NAFTA’s purpose is to establish a free trade North American zone,
but US sugar producers and processors are protesting against Mexico trying to export sugar to
the US at a price lower than the US market. It is important to note that Mexico exports sugar at a
higher price than the average world sugar price. Similarly, Central American Free Trade
Agreement (CAFTA) between US and other Central American countries was signed for
eliminating or reducing trade barriers. According to the CAFTA agreement US has tariff rate
quotas (TRQ) for the Central American countries which increases every year gradually. US sugar
producers and processors have been vocal against this agreement too.
Global sugar trade and policy is determined through World Trade Organization (WTO).
Prominent sugar producing countries like Brazil, Australia, and India have long been for relaxing

7. restrictions on importing sugar in the US. However, it is important to note that all of these
countries support their domestic sugar industry in one form or the other. (18) Brazil and Thailand
has loan schemes and subsidies for their sugar industry. Similarly, India has tight regulations on
sugar price setting, sugar import, and exports. Supporters of the US sugar program fear that
through low prices, subsidies, and “dumping” cheap sugar into the US market, foreign sugar
producers want to control the US sugar market and drive domestic farmers out of business.
Furthermore, they argue that foreign policy and government will heavily influence US sugar
prices and US consumers if the market is dominated by import sugar. (18)
Whereas, the proponents against the sugar program state that US needs to open up its sugar
market so that consumers can benefit from cheaper sugar prices (although this might not be good
from a public health perspective). They argue that US sugar industry should compete at global
market through an open market policy and start producing more sugar by increasing domestic
farm production. According to this view, the US sugar industry is in an incompetent state due to
heavy protection of the government and the unwillingness of the sugar producers and processors
to face competition. They argue that US sugar market should have greater potential and have a
large share in the global sugar export market. (19)
The review of the sugar trade and business domestically and internationally shows that US sugar
program will be very difficult to change or reform in any way. It is clear that US government has
not been addressing this long standing trade dispute regarding sugar import policy in an effective
way. On one hand, there is an issue of protecting the domestic sugar producers and processors
while on the other, there is an issue of free trade agreements and dynamics of trade relationship.
It is unclear on how US government will address the concerns of its trade partners regarding the
sugar trade policy.

8. Recommendation
US sugar program debate is sure to continue in the next farm bill. Those producing and
processing sugar will continue to support the current sugar program and recommend stricter
sugar import laws. Similarly, the sugar-using food and beverage manufacturers will continue to
push for changes in the farm bill so that cheap raw sugar is available for production.
Looking through the public health and nutrition perspective, it seems that the sugar program is
indirectly helping US consumers to reduce sugar intake through higher prices of sugary foods
and beverages. However, considering how higher prices of raw sugar is promoting the use of
High Fructose Corn Syrup (HFCS) in food and beverage manufacturing, the views drastically
change.(19) HFCS is an alternative sweetening agent to sugar which is manufactured from
another subsidized crop: corn. Importantly, consumption of HCFS is considered to be as
detrimental to human health as natural sugar. Food manufacturing companies are shifting to use
HFCS and other corn sweetener alternatives because of the higher prices of domestic sugar. The
consumption of HFCS has increased by 1000% between 1970-1990. (20) Not only is the sugar
program forcing consumers to pay more for sugar containing food products, it is also
exacerbating the public health problem of overweight and obesity. (20) Public health
professionals should support reforms in the current sugar program. Any provision that helps food
manufacturers to use natural raw sugar rather than cheaper and unnatural HFCS should be
strongly supported by public health professionals and nutritionists.
From an agricultural perspective it is clear that sugar processing and producing farms benefit
from the current sugar program. The minimum price guarantee given by US government is well
above the world sugar price and the US consumers are paying more for the sugary products. The

9. sugar program is implemented for protecting US domestic sugar farmers, but the sugar farms
make up only 0.002 percent of total farms in US. (16) However, these farms give about 33% of
the total crop industries’ political campaign donations and account for 40% of the total crop
industries’ lobbying efforts. This seems to be a big reason why the issue of reforming the
existing sugar program does not gain political momentum. The sugar using food and beverage
manufacturing companies should push for minimizing the restrictions on foreign sugar import
and push for reducing the US sugar prices down when compared to average world sugar price.
Food and beverage manufacturing industries as well as US consumers will gain financially from
the decrease in US sugar prices.
Finally, when considering international sugar trade, the US government seems to be very
conservative in its approach. It focuses on isolating US sugar industry rather than encouraging
the sugar industry to compete with the global sugar market. A potential growth of US sugar
market is possible if government adopts a more open market policy and loosens its sugar export
criteria. The US sugar export was just 269,000 tons in year 2013. (21)
In summary, this paper recommends the sugar program in the farm bill needs to be reformed in a
way that benefits not only the limited sugar producing and processing farms but the US
consumers as well. Currently, the heavy protection and support of the US government is leading
consumers to pay higher prices for sugar. Reforming the sugar program will be a challenge
considering the diverse businesses and trade affect by this provision in the farm bill. However,
the key issues in sugar program should be addressed in the next farm bill to avoid further
criticisms and complications in future.

10. References
1. News Release. (n.d.). Retrieved November 7, 2014, from
http://www.usda.gov/wps/portal/usda/usdahome?contentid=2014/04/0051.xml
2. Alvarez, J., & C. Polopolus, L. (n.d.). The Sugar Program: Description and Debate.
Retrieved November 7, 2014
3. Congressional Research Service (2013).Sugar program: The Basics
4. 2014 United States Senate Committee on Agriculture, Nutrition, and Forestry. (2014)
Agricultural Act of 2014.
5. Obesity Prevalence Maps. (2014, September 9). Retrieved November 18, 2014, from
http://www.cdc.gov/obesity/data/prevalence-maps.html
6. Maloney, M., Harnack, L., Stang, J., & Story, M. (1999). Soft Drink Consumption
Among US Children And Adolescents: Nutritional Consequences. Journal of American
Dietetic Association, 99(4), 436-41.
7. Ludwig, D., Peterson, K., & Gortmaker, S. (2001). Relation Between Consumption Of
Sugar-sweetened Drinks And Childhood Obesity: A Prospective, Observational Analysis.
The Lancet, 357(9255), 505-508.
8. C Larsson, S., Bergkvist, L., & Wolk, A. (2006). Consumption of sugar and sugar-
sweetened foods and the risk of pancreatic cancer in a prospective study. The American
Journal for Clinical Nutrition, 84(5), 1171-1176.
9. Slattery, M., Benson, J., Berry, T., Duncan, D., Edwards, S., Caan, B., & Potter, J.
(1997). Dietary sugar and colon cancer. Cancer Epidemiology, Biomarkers, &
Prevention, 6, 677-685.
10. Dhingra, R., Sullivan, L., Jacques, P., Wang, T., Fox, C., Meigs, J. Vasan, R. (2007). Soft
Drink Consumption And Risk Of Developing Cardiometabolic Risk Factors And The
Metabolic Syndrome In Middle-Aged Adults In The Community. Circulation, 116, 480-
488.
11. AMA Adopts Policy Addressing Obesity, Beverages with Added Sweeteners. (2012,
June 20). Retrieved November 18, 2014, from http://www.ama-
assn.org/ama/pub/news/news/2012-06-20-ama-policy-addresses-obesity.page
12. Local Government Actions to Prevent Childhood Obesity. (2009, September 1).
Retrieved November 18, 2014, from http://www.iom.edu/~/media/Files/Report
Files/2009/ChildhoodObesityPreventionLocalGovernments/local govts obesity report
brief FINAL for web.ashx
13. Congressional Research Service. (August 2013) Sugar Program: The Basics.
14. Congressional Research Service. (March 2014) Sugar Provisions of the 2014 Farm Bill.
15. Loyola, M. (2014, July 14). Sugar Shakedown: How Politicians Conspire with the Sugar
Lobby to Defraud America's Families. Retrieved December 2, 2014, from
http://www.heritage.org/research/reports/2014/07/sugar-shakedown-how-politicians-
conspire-with-the-sugar-lobby-to-defraud-americas-families

11. 16. Riley, B. (2014, June 5). U.S. Trade Policy Gouges American Sugar Consumers.
Retrieved December 2, 2014, from http://www.heritage.org/research/reports/2014/06/us-
trade-policy-gouges-american-sugar-consumers
17. Hart, C. (2005). CARD: Center for Agricultural and Rural Development. Retrieved
December 8, 2014, from
http://www.card.iastate.edu/iowa_ag_review/summer_05/article4.aspx
18. Giovanetti, T. (2014, May 28). Seeking a Global Solution in Sugar Trade Policy. IPI
Issues Institute for Policy Innovation. Retrieved December 8, 2014, from
http://www.ipi.org/ipi_issues/detail/seeking-a-global-solution-in-sugar-trade-policy
19. Goone, A. (2011, May 11). US Sugar Protectionism. Retrieved November 26, 2014, from
http://dartmouthbusinessjournal.com/2011/05/u-s-sugar-protectionism/
20. Bray, G., Nielsen, S., & Popkin, B. (2004). Consumption of high-fructose corn syrup in
beverages may play a role in the epidemic of obesity. American Journal of Clinical
Nutrition, 79, 537-543.
21. Brester, G. (2014, September 4). 20 years in, NAFTA finally sours the US sugar
program. Retrieved November 26, 2014, from http://www.aei.org/publication/20-years-
in-nafta-finally-sours-the-us-sugar-program/

12. Appendices