GOP presidential hopefuls shine light on sugar program

Doug Etten sat on his tractor and talked about how people like him have become whipping boys in the Republican presidential campaign.

In a debate earlier this week, would-be GOP nominee Sen. Ted Cruz of Texas vilified the government program that Etten and thousands of other Minnesota sugar beet farmers rely on to keep their businesses stable.

Cruz singled out federal price supports, import quotas and loan guarantees for sugar as a classic example of "corporate welfare." He said that as president he would eliminate "sugar subsidies."

"Sugar farmers farm under roughly 0.2 percent of the farmland in America, and yet they give 40 percent of the lobbying money," Cruz told a debate audience in Milwaukee. "That sort of corporate welfare is why we're bankrupting our kids, and our grandkids."

As he worked his fields near Foxhome, Minn., a day later, Etten said injecting the sugar program into a political campaign is "never helpful."

"It's tough to get it portrayed the way it really is," he said.

Reality seems to be in the eye of the beholder.

Even progressive economists question its necessity as American consumers and food and beverage makers pay more for sugar than those in other countries.

Etten and other beet farmers like Mark Olson of Willmar claim the program brings "certainty," not subsidy. It sets prices for sugar and guarantees those prices by limiting imports and allowing sugar growers to borrow money from the government that can be repaid in sugar if prices dip below a certain level. That has happened once in the past 13 years. In 2013, sugar prices shrank enough that some sugar producers forfeited their product to the government in lieu of loan payments. The forfeitures cost U.S. taxpayers roughly $300 million as the government was forced to sell the forfeited sugar at a loss.

That, along with what opponents claim is an added $3.5 billion in annual costs to U.S. sugar buyers, is a reason to kill the program, critics say. Supporters say 12 out of 13 years at no cost to taxpayers proves that the program has operated efficiently, but worked when it had to to protect farmers.

"There is a lot of education that needs to go on about the sugar program," said Olson. "Ted Cruz isn't educated and he doesn't want to be."

Whether a war of words on the road to the White House threatens the sugar program is uncertain. Sen. John McCain, the 2008 Republican presidential candidate, brought it up, but did not bring it down.

But University of Minnesota economist Tim Kehoe, a trade specialist, said Cruz's comment represents a challenge. "The sugar program may not cost the government much, but it does cost consumers," Kehoe explained. "If the public begins to pay attention to the program, its supporters might have a hard time defending it."

Until now, the program has been politically strong.

In a recently concluded case, U.S. sugar growers and refiners convinced government regulators that Mexico had illegally subsidized sugar production in that country, then dumped a bumper crop into this country, unfairly driving down U.S. sugar prices. The Australians took a run at the American sugar lobby during the newly struck Trans-Pacific Partnership free trade agreement and hit a closed door wall that opened only a crack.

Friends and foes alike marvel at the millions of dollars sugar growers and refiners, led by Minnesota-based American Crystal Sugar Co., pour into hundreds of Senate and House campaigns each election cycle and millions more spent lobbying recipients of that largesse. Even as candy and soft drink producers have coalesced recently with foodmakers and consumer groups to raise Cain, the sugar program won inclusion in the most recent five-year farm bill.

With Minnesota's nation-leading sugar beet industry pumping money into the state's economy, the state's politicians remain singularly supportive, especially Peterson, the ranking minority member of the House Agriculture Committee whose district is home to most of the state's sugar beet industry.

"Normally in presidential campaigns," he said, "agriculture doesn't get talked about at all."

Meanwhile, one of the sugar industry's most powerful players remains defiantly unapologetic.

"The surprising and disappointing thing to me is there was a glaring factual error in what Sen. Cruz said," American Crystal Sugar CEO David Berg told the Star Tribune. "He wanted to save money by ending the sugar policy, and he was going to put that money into the defense budget. In 12 of the last 13 years, the sugar program has cost the federal treasury exactly nothing."