Energy & Environment

Congress should end sugar program that hurts consumers

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For more than 75 years, Congress has maintained a program that benefits a small, special interest group over American taxpayers, and has consistently failed to reform its outdated policies in order to reduce wasteful spending. For example, Congress had an opportunity in the 2014 farm bill to reform the protectionist, command-and-control U.S. sugar program, but instead members voted to maintain a system of price supports and marketing allotments that keeps U.S. sugar prices far higher than world prices. Today, U.S. sugar prices are double the world price, and this isn’t the first time prices have been this high.

{mosads}Following the filing of anti-dumping and countervailing duty cases against Mexican sugar imports and the signing of suspension agreements that further restrain U.S. sugar supplies, these much higher sugar prices are in store for the foreseeable future.

The beneficiaries of current U.S. sugar policy are not American consumers. They unknowingly foot the bill for the program through a hidden tax on sugar-containing products — including everyday staples like bread, pasta and peanut butter — that are more expensive as a result of the high cost of sugar in the United States. This hidden tax cost American consumers and businesses roughly $3.5 billion annually between 2009 and 2012.

The beneficiaries of America’s Depression-era sugar program are not the taxpayers. In fiscal year 2013, the U.S. Department of Agriculture paid nearly $300 million when it was forced to take actions mandated by the program to guarantee price levels and bail out sugar producers. The Congressional Budget Office estimates that U.S. sugar policy will cost taxpayers an additional $115 million over the next 10 years.

The only beneficiaries from the U.S. sugar program are a small, special interest group of sugar producers. There are only 4,579 sugar farms in the United States, with U.S. sugar beet and sugarcane production representing less than 1 percent of total U.S. crop acreage. Compare that to the number of American consumers who pay excessively high prices for products made with sugar.

Sugar production is limited to only a few states: 82 percent of sugar beets are produced in just Idaho, Michigan, Minnesota and North Dakota, while 92 percent of sugarcane is produced in Florida and Louisiana. Put another way, sugar beets and sugarcane are only produced in 56 of the 435 Congressional districts, with only about 20 districts having significant acreage.

It is therefore reasonable to ask why members of Congress allow this program to skate through in farm bill after farm bill. The U.S. sugar program was the only commodity program not reformed as part of the 2014 farm bill.

The 379 members of Congress without sugar beet or sugarcane production in their districts should consider how they are able to justify passing on the costs of the sugar program to their constituents to prop up one small, special interest group they don’t even represent. Those members of Congress should stand up for their constituents and support the consumers and sugar-using industry jobs in their districts. They should not wait for the next farm bill — the time for sugar reform is now.

Paige is vice president of Citizens Against Government Waste.

Tags Department of Agriculture Sugar sugar industry Sugarcane Tax U.S. Sugar Program

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