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Public Statements

Federal Agriculture Reform and Risk Management Act of 2013

Floor Speech

By:
Date:
Location: Washington, DC

BREAK IN TRANSCRIPT

Mr. GOODLATTE. Madam Chairman, this FARRM Bill reforms many commodity programs. It makes major policy changes that leave no commodity untouched except for one. This bill makes absolutely no change to the sugar program. In fact, the sugar program wasn't even given the scrutiny of an audit hearing.

Under this bill, we are being asked to demand sacrifices from farmers in our districts. Wheat, corn, soybeans, cotton, peanuts, and rice--these commodities and more are undergoing major changes and contributing to the deficit reduction in this bill. But we're asked to believe that the sugar program and the sugar program alone is so perfect that it must be left untouched, it cannot be reformed or even discussed. I respectfully disagree.

The sugar program needs to be reformed for many reasons:

First, all serious studies show that the sugar program increases food costs. Economists at Iowa State University put this consumer cost at up to $3.5 billion a year for the first 4 years of the 2008 farm bill.

Second, because it harms the competitiveness of U.S. food manufacturing, the sugar program costs jobs. The Iowa State study estimated that as many as 20,000 new jobs a year could be created if sugar policy were fully reformed. The U.S. Department of Commerce found that for every sugar industry job saved by the program, three good manufacturing jobs were lost.

Third, current sugar policy may not have cost taxpayers at the moment, but the Congressional Budget Office projects that it will in the future. The Feedstock Flexibility Program--which was added to the sugar policy in 2008--is forecast to cost $193 million.

I urge my colleagues to support this amendment.

Fourth, the sugar program constitutes an almost unbelievable government intrusion into private business decisions. Under the marketing allotment system, the federal government tells every sugar company the exact amount of sugar that it is legal for the company to sell, down to the pound. USDA issues press releases every year with each private company's exact sales quota listed. Can you imagine what my colleagues would call that if we did it in any other industry in America? It is a pure command-and-control regime.

For all these reasons, I believe we need a serious discussion about sugar policy. A case could be made to repeal it completely. But that is not what I am proposing.

This amendment does not repeal the sugar program or sugar import quotas.

Instead, the amendment removes several features that were added to sugar policy in 2008, and makes some additional program reforms. Specifically, it eliminates--new restrictions that prevent Secretary Vilsack from increasing import quotas between October 1 and April 1, and require that he set the import quota at the bare minimum allowed under our international obligations, regardless of market needs; the Feedstock Flexibility Program, which requires the government to buy up surplus sugar and re-sell it to ethanol plants at a loss to taxpayers; a de facto domestic content requirement, which prevents USDA from reducing marketing allotments below 85% of the market, even if that would save the government money; and price support increases that were mandated in 2008. This part of the amendment is scored by CBO as contributing to a net savings of $73 million.

The amendment also makes the sugar program more flexible and transparent: first, by permitting developing countries to lease one another's sugar quotas temporarily, thus allowing small quota-holding countries that no longer produce sugar to derive some benefit from their quotas, and ensuring that all quota sugar will actually be imported; second, by setting a goal that ending stocks of sugar will be approximately 15.5% of total demand, thereby making policies more transparent; and third, by restoring Secretary Vilsack's authority to suspend marketing allotments in emergency conditions, authority taken away in 2008.

In 2008, Congress went too far in shackling sugar policy with new market-shorting provisions. We have seen the results in the four years after enactment of the farm bill.

With USDA unable to increase imports even when supplies were tight, both wholesale and retail sugar prices in the United States have set all-time records.

At the same time, the gap between U.S. and world sugar prices widened far beyond historic levels.

Supplies were so tight in the summer of 2010 that the United States imported 200,000 tons of ``high-tier'' or ``over-quota'' sugar. This means the importer willingly paid a tariff that is deliberately set so high as to be prohibitive in normal conditions. There was simply no other sugar available from U.S., Mexican or quota sources.

Once again, our amendment does not change the basic tenets of sugar policy. A good case can be made to do that, but I fully understand that many of my colleagues would not support a repeal. Instead, this amendment rolls back counterproductive policies that have distorted markets and increased consumer costs since they were enacted in 2008.

The amendment's scope is modest, but it is genuine reform. I once again ask my colleagues: Do you really believe that we should cut programs for farmers in your district, but leave sugar policy absolutely untouched? If you do not believe that, please vote for the sugar reform amendment.

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Mr. GOODLATTE. Mr. Chairman, I yield 1 minute to myself.

Mr. Chairman, like Ranking Member Peterson, I have been closely involved in the debate to modernize our dairy system. In fact, at his request, I joined him and other Members to seek a solution to fix our dairy safety net after our current programs failed our producers. We agree that dairy farmers deserve access to a Dairy Margin Protection Program to ensure their production. However, I cannot support a Dairy Supply Management Program, and that's why I've joined with Congressman Scott, Congressman Collins, Congressman Moran, Congressman Duffy, Congressman Polis, Congressman Coffman, Congressman Meeks, Congressman Issa, Congresswoman DeGette, Congressman Sessions, and Congresswoman Lee to offer this amendment to take out the dairy provision and substitute for it what we have in all of our other commodity programs, and that is an insurance program that will save the taxpayers money, will save the consumers a lot of money, and not have a policy where we are actually having the government go to dairy farmers and say, If you want to get your check, you have to reduce the size of your herd.

I urge Members to support this amendment.

I reserve the balance of my time.

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