The U.S. Department of Agriculture announced its plan to allow more low-duty imports of canesugar. The tariff rate quota (TRQ)--the allowable amount of a commodity that can come in without prohibitory tariffs--for raw and refined cane sugar is one of a series of protectionist practices codified in the Farm Bill. The Secretary of Agriculture may only raise sugar's TRQ in "emergency" situations.
USDA's announcement of a nearly 30% increase in the TRQ comes after sugar-using industries alerted Congress and USDA of drastic supply shortages. IBA and other advocacy groups urged Secretary Sonny Perdue to address the situation in February after two sizable sugar refiner-distributors announced they would default on major contracts.
Though cane producers in Louisiana and beet producers in Minnesota indicated weak harvests in late 2019, the Farm Bill's sugar program prohibited USDA from taking incremental steps to ease market concerns.
Instead, the agency was legally required to wait until the situation was dire--cane and beet prices steadily increased, while bakers who contracted with the two suppliers in default had to quickly locate a feasible replacement. The supply chain woes were exacerbated by the COVID-19 outbreak that spread to the U.S in early 2020.
IBA and others in the Alliance for Fair Sugar Policy continue to educate congressional leaders of the serious flaws of the sugar program, which must be modernized to reflect a dynamic sugar market.