At sugar refinery stop, Baucus says farm bill still possible

2012-11-01T18:51:00Z 2012-11-02T10:39:04Z At sugar refinery stop, Baucus says farm bill still possibleBy TOM LUTEY tlutey@billingsgazette.com The Billings Gazette

U.S. Sen. Max Baucus, D-Mont., told sugar producers he’s still determined to pass a farm bill by year’s end and affirmed support for a key industry program.

Baucus, visiting the Western Sugar Cooperative refinery for a “work day” helping process the 2012 sugar beet crop, said that after the election he will push hard for a new farm bill. The Senate passed a farm bill last June, but House Republican leaders, sensing wide divisions over farm bill spending, kept their version from reaching the floor before leaving town in late September to campaign.

“We’re going to make a real effort to get it passed,” Baucus said.

Ervin Schlemmer, who farms near Fromberg, said uncertainty over the farm bill's status weighs on key financial decisions the longer producers wait for a result. The agriculture programs in the farm bill are crucial to securing operating loans at local banks, particularly for less-established young farmers.

The main sticking point between the House and Senate farm bills are cuts to federal nutrition programs like food stamps. Both branches of Congress make cuts to the farm bill’s nutrition programs, which accounts for more than 70 percent of farm bill spending. But the House cuts are deeper and very unpopular with urban lawmakers, especially Democrats. The bill spends roughly $500 billion over five years.

Baucus said there are also farm program differences that were hardly raised as the debate over nutrition program cuts took center stage. He argues that there should be support for the bill because it cuts government spending, at least $23 billion in the Senate version, and ends subsidies like direct cash payments to farmers, who have received the money even in years when their fields were fallow.

The farm bill debate followed lawmakers home as they campaigned for re-election in October, which is always a prime political season for sugar beet farmers even without elections in November.

The candy lobby ramps up its call for the elimination of the sugar program every October just as American children go door to door for Halloween sweets.

The sugar program, embedded in the farm bill, places tariffs on foreign sugar from most countries while leaving the door open for U.S. free trade partners like Mexico and the Dominican Republic. Curbing imports helps to stabilize prices for American farmers of beet and cane sugar.

The candy industry, represented by the Coalition for Sugar Reform, argues that keeping foreign sugar out of the United States means higher candy prices for consumers. Sugar producers say a candy bar might cost two or three cents more than it would if the sugar program, which uses no tax dollars, didn’t exist. They counter that this year sugar prices decreased but candy companies didn’t pass the savings on to consumers.

For Billings, the debate over the program is no small matter. The Western Sugar Cooperative refinery employs more than 150 workers. The industry is a multimillion-dollar contributor to the Billings economy.

In Congress, few are on the fence when it comes to sugar politics, about which major political players don’t mince words. Sen. John McCain, R-Ariz., in Billings campaigning for Rep. Denny Rehberg on Wednesday and Thursday, called the sugar program “a masterful scam” as Senate Republicans tried to strip it from the farm bill in June. Wednesday, on his way to Billings, McCain posted on his Twitter account that “Farm Bill sugar subsidies force consumers to pay more for treats — $3.5 billion a year.” The tweet was quickly reposted by 57 followers of McCain, including lobbyists and House lawmakers, who have yet to vote on a farm bill this year. The 2008 Republican presidential nominee was on his way to North Dakota, the mecca of sugar beet production, for more campaigning Wednesday afternoon.

Baucus, who knocked on doors for Rehberg’s opponent, Democratic Sen. Jon Tester, on Halloween night knew better than to sour on sugar tariffs. Between helping unload sugar beet trucks and bagging sugar in the Western refinery, the senator met with cooperative members to assure them that he was doing everything possible to protect the sugar program and keep trade agreements from dumping sugar on the U.S. market.

“A significant number of lawmakers don’t understand the sugar program,” Baucus said. “It’s not a subsidy.”

Baucus said he didn’t think there would be enough political change in the Senate to endanger the program, which is also supported by Tester.

There is a potential trade issue on the horizon for sugar, Baucus said. Australia, a sugar-producing country, is in talks with the United States over the nine-nation Trans-Pacific Partnership. The TPP needs some tweaking to prevent an increase of Australian sugar imports to the United States.

The United States and Australia already have a trade agreement, which limits Australian sugar imports, partly because Baucus held out for sugar protections. He is currently designated to steer the TPP through the Senate approval process as the chairman of the Senate Finance Committee.

“There's always a way to skin a cat, and I am confident we can get a TPP deal that is good for Montana sugar and good for Montana jobs,” Baucus said.

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