[Congressional Record Volume 141, Number 156 (Tuesday, October 10, 1995)]
[Senate]
[Pages S14899-S14900]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. MIKULSKI:
  S. 1302. A bill to restore competitiveness to the sugar industry by 
reforming the Federal Sugar Program and thereby ensuring that consumers 
have an uninterrupted supply of sugar at reasonable prices, and for 
other purposes; to the Committee on Agriculture, Nutrition, and 
Forestry.


                 the sugar competitiveness act of 1995

 Ms. MIKULSKI. Mr. President, today I may introducing 
legislation to dramatically reform the sugar program run by the 
Department of Agriculture. My bill, the Sugar Competitiveness Act, is 
designed to restore competitiveness to the sugar industry by reducing 
Government intervention in the marketplace.
  Since the present sugar policy was enacted in 1981 we have seen 10 of 
the sugar refining industry's 22 refineries close. Another refinery is 
scheduled to close permanently in the near future. The industry has 
lost over 40 percent of its capacity, not to mention the thousands of 
blue-collar jobs that go with it.
  My own hometown of Baltimore is home to a sugar refining plant. 
Generations of workers have walked through the gates of Domino sugar 
every morning to give an honest day's work for an honest day's pay. My 
bill is designed to save those jobs and preserve the future of the 
sugar refining industry.
  Today, refiners are being forced to operate under an absurd situation 
in which the Department of Agriculture is forcing up the price of their 
raw material--raw cane sugar--to a level higher than the price of 
refined beet sugar. The USDA creates this artificial shortage by 
tightly restricting imports.
  As a result of this Government-inflicted shortage of raw sugar, it 
has become impossible for refiners to compete. All refiners have been 
losing money for months.
  Recently, refiners have been forced to pay 24 to 25 cents per pound 
for raw sugar, while their competitors, the beet sugar processors, have 
been selling refined sugar at those levels. It is impossible for 
refiners to cover these increased raw sugar costs in the refined sugar 
market.
  But, there is more at stake here than the survival of the refining 
industry and its labor. Refiners provide over 50 percent of the sugar 
marketed in the United States. They play an important and unique role 
in ensuring that food processors and consumers have an uninterrupted 
supply of sugar under all circumstances.

  When there is a domestic crop shortage, caused by a freeze or 
drought, as there often is, food processors depend upon the refiners to 
fill the void by importing more sugar. Any further loss of refining 
capacity will seriously endanger the Nation's sugar supply, to the 
detriment of consumers and food processors throughout the country.
  The first thing my bill would do is eliminate USDA marketing 
allotments. These allotments limit the amount of sugar that domestic 
surgarcane and sugar beet processors can sell.
  The second thing the bill does is to reduce the raw sugar cane loan 
rate from 18 cents to 12 cents per pound in stages, 2 cents per year 
for 3 years. Currently the USDA offers loans at a floor of 18 cents per 
pound for raw cane sugar, which is nearly double the world price of 
sugar. These loans set minimum prices that sugar processors must pay to 
producers, which drive up the cost of sugar for consumers.
  Third, my bill regulates sugar imports to ensure that the market for 
raw cane sugar does not exceed the loan rate or the world market price, 
whichever is higher. Because the sugar program is designed as a no-net-
cost subsidy, and the loans are non-recourse, the USDA keeps the market 
price for sugar processors much higher than necessary.
  The fourth effect this legislation would have is to provide for 3-
month CCC loans, and convert those loans from a non-recourse to a 
recourse basis. Under the current loan structure, sugar processors must 
put up sugar as collateral for loans. At the end of the present 9-month 
loan, the processor must decide to do one of two things, pay back the 
loan with interest or forfeit the sugar they put up as collateral. 
Processors can choose to simply hold on to the Government's money and 
forfeit the sugar collateral if it is more profitable.
  If the processor forfeits, the disposition of the collateral sugar 
would fall to USDA. In order to avoid that possibility USDA maintains 
the market price much higher than the loan rate. Why should the 
taxpayer subsidize non-recourse loans to corporations? My bill would 
correct the situation to the benefit of consumers by changing the loan 
structure to a recourse loan, which requires that processors repay the 
loan instead of simply forfeiting the sugar to USDA.
  Finally, the proposed legislation increases the sugar marketing 
assessment, and extends it to imported sugar. The sugar marketing 
assessment is a fee paid by domestic processors to the CCC. Currently 
foreign processors who are allowed to sell limited amounts of sugar in 
the United States do not have to pay this. This bill levels the playing 
field between foreign and domestic processors.
  Mr. President, America is at the crossroads. Over the past decade we 

[[Page S 14900]]
  have seen manufacturing jobs disappear in city after city. We have seen 
good paying jobs move out of our urban areas if not out of the country. 
Cities are being decimated by the flight of the middle class. Plants 
are closing and the jobs that honest, hard-working Americans rely on to 
feed their kids and put food on the table are disappearing.
  I've decided that I'm not just going to stand by and watch. This 
Congress owes it to working men and women to do all we can to preserve 
those jobs, to level the playing field and to allow those that have 
made America a world economic leader to continue that job. When we talk 
about the current sugar program we're talking about a bad Federal 
policy that tears at the backbone of American manufacturing.
  I think this bill moves the sugar program toward a more competitive 
base and will have dramatic impacts on lowering the price of sugar to 
consumers by letting market conditions dictate sugar prices instead of 
the U.S. Government.
                                 ______