Congress Poised to Prop Up Sugar Regime

Congress Poised to Prop Up Sugar Regime

Farm Bill to Force Higher Sugar Prices
July 16, 2007

Washington, D.C., July 16, 2007—Americans have been paying for sugar at two to three times the world price over the past 25 years, thanks to price supports mandated by Congress, constraints on domestic supply, and restrictions on imported sugar.  Now Congress wants to prop up sugar prices even higher.  

House Agriculture Chairman Collin Peterson's (D-MN) proposals for the 2007 Farm Bill contain a provision that would increase the current sugar price support from 18 cents to 18.5 cents per pound for raw cane sugar, and from 22.9 cents to 23.5 cents per pound for refined beet sugar.

A study by Promar International estimates the cost to American consumers would be an additional $200 million per year. 

"Sugar price supports are a form of corporate welfare," said Fran Smith, an adjunct fellow at the Competitive Enterprise Institute.  "The rest of us pay the price, not just for the sugar itself, but in lost jobs and harm to ecologically sensitive areas, such as <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Florida's Everglades, and the loss of economic opportunities for many small farmers in poor countries."

A Department of Commerce study found that the U.S. sugar program has led to a loss of 10,000 jobs in candy manufacturing from 1997-2002.  In fact, for every one job saved in the sugar industry, three jobs were lost in the confectionery industry.

The House Agriculture Committee is scheduled to debate the new farm bill starting July 17, with the full House expected to consider farm legislation later this month.

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