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Exclusive: Corn refiners declare war on sugar, conservative groups jump onboard

For decades, it’s been an unspoken rule among Washington’s agricultural lobbyists: advocates for one crop do not attack other crops, so that everyone’s benefits can be protected.

But a leading member of the traditionally united community plans to do just that: the Corn Refiners Association is about to invest heavily in an effort to unwind the lucrative breaks afforded to sugar, which are among the most generous in U.S. agriculture.

The Corn Refiners, representing companies that produce high-fructose corn syrup, just hired 10 outside lobbyists for an aggressive, unorthodox attack on the federal sugar program just a year after a new farm bill was signed into law. Their first target is the agriculture appropriations bill, now moving through a House committee.

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While other crop subsidies have withered, Washington’s taste for sugar has been constant. The sugar program, which has existed in various forms since the 1930s, uses an elaborate system of import quotas, price floors and taxpayer-backed loans to prop up domestic growers, which number fewer than 4,500.

Sugar’s protected status is largely explained by the sophistication and clout of a small but wealthy interest group that includes beet farmers in the Upper Midwest, cane growers in the South and the politically connected Fanjul family of Florida, who control a substantial part of the world sugar market. That mix of factors has led to an eclectic coalition on sugar’s side, from Sen. Marco Rubio (R-Fla.) to Sen. Al Franken (D-Minn.).

“While every other farm support program has received multiple rounds of reforms, big sugar has not been touched,” said John Bode, CEO of the Corn Refiners group.

The American Sugar Alliance, through Communications Director Phillip Hayes, declined to comment on this story. The group has long argued that sugar price supports are needed to protect American jobs from foreign competition.

The anti-sugar effort includes a team of left and right interests, lobbyists and organizations—from environmentalists and consumer groups to trade associations for bakers and confectioners.

Many of them applauded the move, with some on the right suggesting the attack on sugar could become a litmus test for conservative candidates going forward, much as the Export-Import Bank has been in the first half of this year.

“Defeating the sugar lobby is the next campaign after Ex-Im,” Grover Norquist of Americans for Tax Reform said late Tuesday night. “Both are cronyism in its undiluted, inexcusable majesty. Both have survived because they perfected the skills to control Congress for their own profit. If they go down, no political subsidy will be safe. The implication of these wins is bigger than the ban on earmarks.”

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The conservative Club for Growth also praised the expanding campaign.

“If there is more muscle going into anti-sugar subsidy efforts, we welcome it,” said Andrew Roth, vice president of governmental affairs for the group, which has been leading the ongoing Export-Import campaign and has long opposed the sugar subsidy.

Roth said that going after the sugar subsidy “is high on the list” of topics the Club will emphasize after the Ex-Im campaign concludes, noting that the group always asks candidates where they stand on the breaks for sugar during the endorsement process.

That could spell political trouble for Rubio and Jeb Bush, presidential candidates from Florida with a history of supporting the sugar industry, which is centered in their state. On Tuesday night, asked if he still backs special breaks, a Rubio spokesman pointed to a 2012 press release defending his position that called the sugar industry “an important job creator in Florida” and complained that “the global sugar trade is not a level playing field.” A Bush spokeswoman did not immediately comment.

The refiners represent some of the world’s biggest and most influential agriculture conglomerates—including Archer Daniels Midland and Cargill—that produce sweeteners, ethanol, corn oil, feed and other corn biproducts. The Corn Growers Association declined to comment.

Bode, a former assistant secretary of agriculture during the Ronald Reagan and George H.W. Bush presidencies, was outspoken in an unusual way for a Washington agribusiness insider.

“This is pure crony capitalism,” he said. “Sugar is a mere footnote in American agriculture production, but they make more political contributions than the rest of agriculture combined.  That’s why they have defeated all attempts at reform since 1980.”

“When the rest of U.S. agriculture is driving exports, why protect sugar from foreign competition? The program is an anachronism,” he added.

Scott Faber of the Environmental Working Group, which opposes the subsidy, said the new coalition “is our best chance yet to finally reform our insane sugar policies.”

Advocates for reform in the House also cheered the arrival of the corn refiners to the fray.

“Powerful lobbying interests made sure that, in the last farm bill, the federal sugar program was the only commodity program that was not reformed,” said Rep. Joe Pitts, a Pennsylvania Republican who has helped lead the attack on the sugar program since 2011.

In 2013, Pitts’ amendment to change the program failed on a 221 to 206 vote. It would have cut the program’s domestic supply restrictions, lowered price supports and rolled back what he termed “unnecessary provisions added in 2008 that unfairly benefit wealthy sugar farmers at the expense of consumers.”

“Sugar subsidies impose exorbitant costs on taxpayers, consumers and workers in sugar-using jobs alike,” Pitts said. “Despite the claims of the sugar program’s Washington lobbyists, taxpayers found out shortly after the farm bill passed that the program costs them nearly $300 million that year.”

Refiners and sugar producers have clashed repeatedly over the relative health benefits of pure sugar vis-à-vis high fructose corn syrup. For the most part, this battle has taken place in obscure medical journals and before health advisory panels. In the process, high fructose corn syrup has lost market share to sugar.

Agriculture insiders said that trying to eliminate their support system is the most logical way for the corn growers to fight back. “It’s like a punch to the gut,” said a D.C. lobbyist who works on these issues but is not involved in this fight.

Corn’s new lobbyists, all with the Alpine Group, submitted their registration forms after hours on Tuesday night. Those involved include Barry Brown, who has served as chief of staff or legislative director for three former Texas Republicans, including Rep. Kay Granger. The firm also named Mike Hogan, former deputy chief of staff to ex-Sen. Ben Nelson (D-Neb.); Bob Brooks, former chief of staff to ex-Rep. Jim McCrery (R-La.); Jason Schendle, former counsel to ex-Sen. Mary Landrieu (D-La.); and Lauren Bazel, tax advisor to John Kerry when he served in the Senate, as a Democratic member from Massachusetts.

The mix of lobbyists reflects the extent to which the divide on the issue tends to be more geographic than partisan.

Sen. Jeanne Shaheen (D-N.H.), a longtime advocate for changing the sugar support program, predicted that the corn refiners’ participation will provide “extra wind at our back.” She said there is a “growing recognition that taxpayers shouldn’t be footing the bill for excessive support that the sugar industry clearly doesn’t need.”

Dan Holler, communications director for Heritage Action, the conservative think tank’s lobbying arm, said their odds of winning go up when they isolate sugar from the broader farm bill fight. Pointing to the 2013 Pitts amendment, he said that going after sugar is “a whole lot further along” than the push to kill the Export-Import bank at this point in 2012.

“Using the protectionism that exists around sugar to highlight the dreadful nature of America’s farm policy is very important to us,” he said. “This is the farm lobby—this is all they do – they spend five years preparing for the farm bill and they’ll spend five years preparing for the next one. Conservative activists bounce from one thing to the other.”

Not every conservative group celebrated the corn growers jumping into the fray. James Davis from the Freedom Partners Chamber of Commerce said that his group opposes special breaks for sugar and corn growers.

“We’re not real interested in climbing in bed with the corn lobby to accuse the sugar industry of being prostitutes,” he said. “We oppose all forms of corporate welfare.”