Sugar growers release Brazil study
April 17, 2013 | 07:56 PM
The American Sugar Alliance today released a study that it says shows that a complex web of Brazilian government programs provides nearly $2.5 billion per year in sugar subsidies, giving Brazil, with nearly 50 percent of global sugar exports, an advantage in international sugar markets.
“This report underscores the importance of maintaining the current U.S. sugar policy, which was designed to shield consumers from foreign market manipulation and ensure an affordable, homegrown supply of a food staple,” Jack Roney, the ASA chief economist, said in a news release.
“U.S. sugar producers are highly efficient, but to disarm unilaterally while foreign subsidies run rampant would lead to job loss and leave us dependent on unreliable, subsidized foreign sugar.”
The study was conducted by Patrick Chatenay, a British-based sugar and ethanol expert who has worked in the European and Brazilian sugar industries and previously wrote a report for ASA on changes in the European sugar industry.
Chatenay said Brazilian sugar is subsidized through direct payments, debt forgiveness, usage mandates, lower tax rates for sugar producers, and special interest rates on government loans. Actual subsidization amounts could be much higher than $2.5 billion because of unreported debt restructuring, Chatenay said.
He concluded that Brazil would need a 15 percent increase in sugar prices to remain profitable if the government supports were ended.
“This report underscores the importance of maintaining the current U.S. sugar policy, which was designed to shield consumers from foreign market manipulation and ensure an affordable, homegrown supply of a food staple,” Jack Roney, the ASA chief economist, said in a news release.
“U.S. sugar producers are highly efficient, but to disarm unilaterally while foreign subsidies run rampant would lead to job loss and leave us dependent on unreliable, subsidized foreign sugar.”
The study was conducted by Patrick Chatenay, a British-based sugar and ethanol expert who has worked in the European and Brazilian sugar industries and previously wrote a report for ASA on changes in the European sugar industry.
Chatenay said Brazilian sugar is subsidized through direct payments, debt forgiveness, usage mandates, lower tax rates for sugar producers, and special interest rates on government loans. Actual subsidization amounts could be much higher than $2.5 billion because of unreported debt restructuring, Chatenay said.
He concluded that Brazil would need a 15 percent increase in sugar prices to remain profitable if the government supports were ended.
