	Overview of Sugar Program

The U.S. sugar program provides a price guarantee to producers of sugar beets and sugarcane and to the processors of both crops. The U.S. Department of Agriculture (USDA) further is directed to administer the program at no budgetary cost to the federal government by limiting the amount of sugar supplied for food use in the U.S. market. To achieve both objectives, USDA has four available tools—as reauthorized by the 2014 farm bill (Agricultural Act of 2014, P.L. These are: 
extending price support loans to processors at specified levels (the basis for the price guarantee); setting marketing allotments to limit the amount of sugar each processor can sell; establishing import quotas to restrict the amount of sugar allowed to enter the U.S. market; and making a sugar-to-ethanol backstop available if marketing allotments and import quotas are insufficient to keep market prices above guaranteed levels. Supporters of Sugar Program

During farm bill debate, producers of sugar beets and sugarcane, and the beet refiners and raw sugar mills that process these crops into refined sugar and raw cane sugar, respectively, supported extending the U.S. sugar policy as contained in the enacted 2008 farm bill. Two floor amendments offered to change the Senate Agriculture Committee-reported measure were defeated. S.Amdt. S.Amdt. 2433 (defeated on a 46-53 vote) would have reverted most program authorities to those in effect prior to the 2008 farm bill changes and would have repealed the sugar-to-ethanol program. 6083 ) also would have reauthorized the sugar program without change. Legislative Activity in the 113th Congress

The Senate-passed farm bill ( S. 954 ) and the House-passed farm bill ( H.R. 1947 ) proposed to continue 2008-enacted U.S. sugar policy without change. This proposal, similar to H.R. For comparison, the table also lays out the provisions of the defeated Sugar Reform Act offered as floor amendments during the debate on the 2014 farm bill. 925 proposed to reduce price support levels (from 18.75¢/lb. for refined beet sugar), and to make a number of changes to require USDA to administer sugar marketing allotments and sugar import quotas in ways that would result in sugar being available "at reasonable prices." 693 (Sugar Reform Act) introduced earlier in 2013, and to the amendment offered during Senate floor debate. Cost Estimates

The Congressional Budget Office (CBO) projected in its May 2013 baseline that the continuation of current sugar policy as approved by the Senate, and reported by the House Agriculture Committee, would result in budget outlays of $39 million over 5 years (FY2014-FY2018) and $188 million over 10 years (FY2014-FY2023). While CBO scored the operation of the sugar price support program at zero in each of these time periods, its projection assumed that USDA will in some years need to activate the sugar-to-ethanol program. Since the amendment would have repealed the sugar-to-ethanol program, this score implied that USDA in some years would record outlays in administering the sugar program's price support operations. With the actions that USDA took to head off loan forfeitures of 2012-crop processed sugar, and its subsequent decisions to implement the sugar-to-ethanol program using sugar that processors forfeited, the sugar program recorded $259 million in budget outlays (i.e., $141 million in FY2013, $118 million in FY2014). Sugar growers and processors sought the highest level possible, so long as the program's minimum price guarantee was met. Users of sugar in manufactured food products sought as low a price as possible within the basic structure of the 2008-enacted program. In reacting to final farm bill action, food manufacturers that use sugar signaled their intent to continue to fight for reform by working with House and Senate leaders to make sure the sugar program "is on the table, even if those legislative efforts must take place outside of the Farm Bill process."
The 2014 farm bill (Agricultural Act of 2014, P.L. 113-79) continues the sugar and the sugar-to-ethanol programs without change for another five years (i.e., through FY2019). The sugar program provides a minimum price guarantee to sugar crop processors and is structured to operate at no cost to the federal government using two tools: marketing allotments that limit the amount that sugar processors can sell, and import quotas that restrict the quantity of foreign sugar allowed to enter the U.S. market. The sugar-to-ethanol program is intended to be used if marketing allotments and the administration of import quotas do not succeed in keeping market prices for sugar above minimum guaranteed levels. If activated, it ensures that stocks of sugar are not carried over to the following marketing year so as to continue to depress prices.
During farm bill debate, Members of Congress engaged in vigorous debate on future sugar policy on behalf of both sides. Sugar producers/processors and food manufacturers also waged aggressive media campaigns to influence the outcome of amendments offered during floor debate. Producers of sugar beets and sugarcane, and the processors of these crops into sugar, favored retaining the current program without change. They highlighted the jobs and economic activity created by the domestic sugar sector. Food manufacturers that use sugar in their products sought flexibilities in how the U.S. Department of Agriculture (USDA) administers the program, with an eye toward paying lower prices as a result. In advocating changes, they pointed to the higher wholesale refined sugar prices paid since the 2008 farm bill provisions took effect (twice the level compared to the previous 2002 farm bill period), and to the jobs that their firms create.
The enacted provisions reflect those agreed to by the House and Senate Agriculture Committees in reporting out their respective farm bills. During the period that Congress considered this latest farm bill (2012-2014), opponents of the sugar program offered five floor amendments to change both committees' reported provisions and to instruct House conferees. All were defeated. In the 112th Congress, S.Amdt. 2393 to S. 3240 would have phased out the program within three years. S.Amdt. 2433 to S. 3240 would have reverted most program authorities to those in effect prior to the 2008 farm bill changes and repealed the sugar-to-ethanol program. In the 113th Congress, S.Amdt. 925 to S. 954 and H.Amdt. 227 to H.R. 1947 would have lowered price support levels to those in effect in FY2008, and made a number of changes to require USDA to administer sugar marketing allotments and sugar import quotas so that sugar would be available "at reasonable prices." It also would have repealed the sugar-for-ethanol program. These amendments were nearly identical to the freestanding Sugar Reform Act (S. 345 and H.R. 693).
In scoring the farm bill, the Congressional Budget Office (CBO) estimated that if current sugar policy continued, a 10-year total of $188 million in outlays would occur for FY2014-FY2023, all of it associated with the sugar-to-ethanol program. CBO scored the Sugar Reform Act as reducing these outlays by $82 million over this period. Separately, USDA actions taken in late FY2013 to reduce sugar supplies and activate the sugar-to-ethanol program to prop up market prices did not boost prices sufficiently above program-guaranteed levels. Consequently, these, together with subsequent USDA actions to dispose of sugar pledged as collateral for loans by processors and then forfeited, resulted in $259 million in federal outlays associated with the 2012 sugar crops.
Although existing sugar policy remains intact in the 2014 farm bill, the debate between sugar program supporters and opponents, which largely revolves around the level of domestic sugar prices, is expected to continue. Sugar growers and processors seek the highest price possible, with backstops in place to ensure they receive the benefits of the current price guarantee. Users of sugar in manufactured food products want as low a price as possible within the basic structure of the current program.