[Congressional Record Volume 141, Number 168 (Friday, October 27, 1995)]
[Senate]
[Pages S16103-S16104]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                           U.S. SUGAR PROGRAM

  Mr. INOUYE. Mr. President, I agree that debate and open scrutiny of 
the Sugar Program is important this year. I would like my position to 
be clear. 

[[Page S 16104]]

Though I accept that some level of reform to the program is inevitable 
and necessary, I do not believe emasculation or outright elimination is 
wise.
  My grandfather and grandmother emigrated from Japan to work at 
McBryde Sugar Co. on the Island of Kauai in 1899. In my office here in 
Washington I have a framed copy of the contract on which my 
grandfather, Asakichi Inouye, placed his ``X.'' The contract includes a 
photograph of this brave young man and his wife, and a little baby boy 
they are holding. My father.
  Nearly a century later, Asakichi Inouye's grandson is proud to be 
representing the State of Hawaii in the U.S. Senate. McBryde Sugar is 
phasing over to coffee production, but sugar is still the biggest 
agricultural activity in Hawaii. Sugar is still the third biggest 
business in Hawaii, trailing only tourism and defense spending.
  I am proud to represent the 6,000 men and women in Hawaii who still 
work directly or indirectly for the sugar industry, and their families. 
All these people's livelihoods are at risk if the U.S. sugar policy is 
eliminated.
  I am proud to represent agricultural workers who are among the 
world's most productive. Hawaii produces more sugar per worker, and per 
acre, than anywhere in the world.
  Our workers have enjoyed collective bargaining for decades and are 
rewarded for their productivity with good wages, with some of the best 
health care benefits in the country, and with generous benefits for 
insurance, retirement, and in many cases, housing. Their safety and 
their health are bolstered by some of the strictest worker protection 
rules and highest environmental standards in the nation, and possibly 
in the world.
  These workers, many of whose families have been in sugar for three or 
four generations, lead comfortable, but by no means extravagant lives, 
can put their children through college, and can look forward to a 
decent retirement.
  Sadly, Hawaii sugar production has dropped nearly in half in just the 
past 7 years as half our sugarcane plantations have shut down. Why have 
these farms closed? Because producer prices for sugar have been flat, 
or even declining, for the past decade. Despite their extraordinary 
productivity, these farmers cannot reduce costs rapidly enough to cope 
with inflationary prices for their inputs and flat or declining prices 
for their output.
  In the absence of U.S. sugar policy, an abrupt decline in U.S. 
producer prices for sugar is a virtual certainty. If U.S. producer 
prices for sugar decline further, Hawaii's remaining sugarcane farms 
will close. Thousands more of my constituents will lose their 
livelihoods.
  This sad situation will not be unique to Hawaii if we lose the Sugar 
Program. Similar scenes will be played out in the many rural areas of 
this country dependent on the sugar industry.
  Let me say, however, that I would not object to the elimination of 
the Sugar Program if other nations also eliminated any and all measures 
to favor their domestic sugar producers, processors and consumers. 
However, we must consider the realities of world market conditions such 
as the sugar price support in the European Union, which is 35 percent 
higher than that of the United States. A U.S. Sugar Program is a 
necessary response to generous production and export subsidy programs 
in other countries.
  Opponents of the Sugar Program say that it costs Americans over a 
billion dollars annually and point to the low world price of sugar, 
which hovers around $0.14 per pound, as the savior of the American 
sugar consumer. However, this fictitious world price is created by the 
direct financial subsidies and export incentives provided to foreign 
producers by their own governments, which in turn allow these producers 
to dump excess sugar on the supposed world market at substantially 
below production cost. If we think there is an endless supply of this 
dump-priced sugar, we are fooling ourselves into relinquishing control 
of our domestic market to foreign producers.

  I believe that if we had a level playing field, we could play at the 
highest level of competition with anybody. While the GATT, the NAFTA, 
and the Canadian Free-Trade Agreement are moving us in that direction, 
I do not believe we are there yet.
  I would also ask, ``How has the U.S. Sugar Program fared as a 
domestic public policy?'' While there are several dimensions to such an 
evaluation, I focus on three particular aspects: impact on the American 
consumer, impact on the innovativeness of the producing and processing 
components of the U.S. sugar industry, and impact on the Federal 
Treasury.
  Under the U.S. Sugar Program, American consumers have enjoyed a 
retail price of refined sugar that is lower than that paid by consumers 
in other developed countries. On average, sugar prices paid by 
Americans are nearly 30 percent lower than in other developed nations.
  In April of this year, the average retail price of a pound of sugar 
in developed nations was $0.54; the price was only $0.39 a pound in the 
U.S., but over $1.00 in Japan and about $0.69 in France. Relative to 
other developed countries, U.S. consumers save approximately $2.6 
billion annually on purchases of sugar and products sweetened with 
sugar.
  However, besides price, American consumers demand consistent quantity 
and quality. In other words, when consumers go to the grocery store to 
purchase sugar, they expect a high quality product that is safe and 
contaminant free, and identical with every purchase. They also expect 
to find such products on the shelf whenever they want to buy them. This 
is exactly what the American consumer gets from the U.S. sugar 
industry--so much so that we take it for granted. However, one need 
only recall the shortages in the former Soviet Union to know that this 
is not a universal occurrence. Thus, from a consumer viewpoint, I give 
high marks to the sugar program as domestic public policy.
  Another aspect of public policy is how well it stimulates innovation 
in the production and processing components of the industry. Simply 
looking at the increasing productivity of domestic sugar producers and 
processors will clearly signal the fact that the sugar program has not 
stifled innovation.
  You do not get the deserved reputation as one of the most efficient 
sugar producing nations in the world by suppressing innovation. Support 
of domestic sugar production and processing has been maintained at a 
level to protect against unfair competition, but not at a level to 
preclude fair competition. Thus, from the innovation-encouraging 
perspective, I give high marks to the sugar program as domestic public 
policy.
  Finally, Federal law requires that the sugar program operate at no 
cost to the Federal Treasury. U.S. sugar growers receive absolutely no 
subsidy from the Government. The only payments are from the producers 
to the Government. In fact, through a congressionally mandated 
marketing assessment, the U.S. sugar industry actually contributes more 
than $30 million annually to the Federal Treasury. So, considering its 
benefit to the Federal Government's economic condition, I again give 
high marks to the Sugar Program as domestic public policy.
  Let me close by saying again that I am not opposed to necessary and 
useful reform to the U.S. Sugar Program this year; though I do not 
think that unilateral disarmament is the solution. The sugar industry 
has committed itself to supporting an elimination of the Sugar Program 
if and when other sugar producing nations take the same action. I will 
make this commitment as well. Until we reach that time, however, we 
must protect our industry, our market, and our consumers from 
subsidized competition from abroad.

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