U.S. Sugar Support Lives: Protection Too Sweet To End

The provisions by which Washington transfers wealth from 316 million American consumers to a few thousand sugar producers are part of a "temporary" commodity support program created during the Great Depression. Not even the New Deal could prolong the Depression forever. It ended. But sugar protectionism is forever. The Senate recently voted 54-45 against even mild reforms of the baroque architecture of protections for producers of sugar cane and sugar beets. The government guarantees up to 85% of the U.S. sugar market for U.S.-produced sugar. The remaining portion of the market is allocated for imports from particular countries at a preferential tariff rate. Minimum prices are guaranteed for sugar from cane and beets. Surplus sugar — meaning that which U.S. producers cannot profitably sell — is bought by the government and sold at a loss to producers of ethanol, another program whose irrationalities are ubiquitous. All this probably means $3.7 billion in higher sugar costs. It also means scores of thousands of lost jobs as manufacturers of candy and products with significant sugar content move jobs to countries where they can pay the much lower world price of sugar...more