“Stop sugar subsidies” read the editorial in the Los Angeles Times yesterday. Right on. What's encouraging is that the editorial writer dug a little deeper, not only into the U.S. sugar program's perversities, but also in what could be done to change things, even though he says the chances for reform are slim. But the editorial notes that “buyouts” of farmers have worked before -- why not try that with the sugar producers:
But even if Congress can't find the courage to beat sugar growers, it might be able to buy them out. Not long ago, peanuts and tobacco enjoyed similar protections — the government artificially inflated their prices by restricting imports and setting quotas on how much domestic producers could grow. But in 2002, the government bought back production quotas from peanut farmers, then made a similar deal with tobacco growers in 2004. In essence, these farmers gave up all market protections in exchange for set payments over a finite number of years. Such agreements shift the burden of farm protection from consumers to taxpayers, which isn't much of a bargain in the short term. But once the payments run out, taxpayers are off the hook. It's an investment in sane agricultural policy, lower food prices and fair trading partnerships.
CEI, in a monograph a year ago, pointed to the buyouts of tobacco and peanuts as possible models for reforming the U.S. sugar program. Cato last week promoted buyouts of sugar and dairy as sensible reforms for the 2007 farm bill, as I noted in this earlier post.