U.S. sugar policy will operate without cost to taxpayers over the next decade, just as it has since 2002, according to data released in February by the U.S. Department of Agriculture (USDA).
Similar no-cost projections through 2020 were made by the USDA earlier in the year and used by the White House in its annual budget request. This is good news to taxpayers because in 2007, sugar policy was projected to cost $1.3 billion over 10 years. And it is welcome news to sugar producers.
“Nowadays, you’d be hard-pressed to find any government policy that doesn’t carry a price tag, let alone one that is so essential to keeping thousands of American jobs,” said Russell Mauch, a North Dakota farmer and current president of the American Sugarbeet Growers Association. “With record budget deficits, we believe these projections will be well received on Capitol Hill.”
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But Mauch cautions that these are just projections that can be quickly undone if policy or market conditions drastically change. For example, there is a new Farm Bill due out in 2012, and weakening sugar policy in that new bill could carry taxpayer cost.
In addition, he pointed to future trade deals, World Trade Organization negotiations, misjudgments in setting import quotas, and unneeded sugar from Mexico flooding the market under NAFTA as other issues that could undo projected taxpayer savings.
The USDA did not directly calculate budget outlays in its recent report, “USDA Agricultural Projections to 2019.” However, the forecast showed no expected forfeitures of federal sugar loans and no use of a sugar-to-ethanol provision in the Farm Bill – the two components of sugar policy that could have a taxpayer expense.
The USDA did forecast budget outlays earlier in the year for use in compiling the president’s budget request. Those official projections showed no cost for sugar policy from 2010 to 2020, which is $1.3 billion less than the Congressional Budget Office was expecting before the 2008 Farm Bill became law.
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