For all the back and forth over what amounts to a very small, no-cost component of the Farm Bill, one advertisement that appeared during the ’96 fight still sticks in my mind. In my opinion, it summarizes the more than three-decade-old debate and cuts through all the noise.
The advertisement depicted the iconic wolf from the Little Red Riding Hood fairy tale. That wolf symbolized sugar opponents luring in victims with candy and sweet sounding words, and for me, it drove home the fact that the sugar policy debate was about some big food companies looking to get richer on the backs of farmers and U.S. workers.
Regardless of the spin surrounding the debate throughout the years, sugar policy votes have had little to do with everyday consumers and everything to do with corporate profit margins.
Here’s what I mean. During the 1980s, big food companies paid sugar producers an average of 27 cents for a pound of sugar. In the 1990s, they paid 27 cents for a pound of sugar. And when I left office in 2003, food manufacturers were paying 26 cents for a pound of sugar (the average from 2000-2009 was just below 28 cents).
So did consumer prices for sweetened products remain flat? Of course not. Candy, cakes, ice cream, cookies, and other sweets cost a lot more in 2003 than they did in the 1980s. Food manufacturers increased prices and profits at the farmers’ expense, and all the while, they hollowly complained about “high” sugar prices harming consumers.
More recently, sugar prices experienced a brief uptick due to global supply shortages and the candy company cries intensified. But those prices have come down 20 percent since the summer of 2010, yet food prices have continued an upward march.
Bottom line: History shows that lower sugar prices don’t reach consumers because corporate interests devour the windfall to pad profits. That’s not surprising; that’s business. But that’s a lot different than the line lawmakers are being fed.
And even if food manufacturers bucked the trend this time and lowered prices instead of increasing profits, consumers wouldn’t even notice because, as one major beverage manufacturer told the New York Times years ago, “The cost of the sweetener in the product is extremely minimal to the point of not even mattering.”
He’s right, there’s only about two cents worth of sugar in a candy bar.
So if it’s not about consumers but rather about the health of the industries involved, how are those players faring?
Nearly 110,000 sugar jobs were lost from 1994-2008 because of stagnant, low sugar prices, but that trend is being reversed thanks, in part, to the current sugar policy, which operates without taxpayer cost.
Confectioners, meanwhile, are thriving. Since the 2008 Farm Bill passed, U.S. Census data show that domestic production of candy and chocolate has increased, which means factory expansions and job growth. Wall Street has dubbed the healthy sector as “recession proof.” And the industry’s own trade association has boasted of big profit margins, record-setting sales, and rising revenues.
Sounds like a great success story that the Big Bad Wolf has no business attacking.
Combest, a Republican from West Texas, served in the U.S. House of Representatives for nearly 20 years, including as chairman of the Select Committee on Intelligence and the Agriculture Committee. He now consults for numerouse farm groups, including the American Sugar Alliance.