John Stossel and the team at Reason TV have a new video out on the expensive and wasteful federal sugar program, which benefits a tiny handful of wealthy families while raising prices for everyone else.
The Competitive Enterprise Institute—in particular Adjunct Fellow Fran Smith—has opposed sugar subsidies and import restrictions for many years. Back in 2006, Fran wrote (with Barbara Rippel and Ivan Osorio) the study “Is the U.S. Sugar Problem Solvable?,” laying out the problems with the program:
The policy has been widely criticized both at home and abroad for supporting a relatively small group of sugar producers at the expense of consumers, taxpayers, sugar-using industries, and the environment. The program relies on restricting sugar imports to keep domestic prices high, which especially hurts those developing countries that are low-cost producers of sugar. The artificially high price also provides incentives for domestic sugar producers to increase production into environmentally sensitive areas.
Over several years, in the lead-up to the 2008 farm bill and during debate and negotiations, CEI ran a bipartisan, left-right coalition of nonprofits focused on getting rid of the U.S. sugar program, with its domestic supply constraints, price supports and quota system for imported sugar. Under CEI’s auspices, the Sugar Reform Alliance published studies, opinion articles, educational materials and videos and maintained a website devoted to sugar reform. Members also held seminars on Capitol Hill and briefed policy makers on how the sugar program harms consumers, sugar-using companies and the poor in developing countries.
We at CEI and others fought long and hard against a formidable sugar lobby that had strong bipartisan support in Congress, and we, unfortunately, were unsuccessful in our efforts. This year, when a new farm bill will be negotiated in a new cost-conscious Congress, there may be a better chance of ending the egregious sugar program. CEI will again be weighing in.
Fran and several other free-market advocates also joined in on a coalition letter to senators who were about to vote on the 2013 farm bill, urging reform:
Under this program, the federal government makes all the decisions about supply and demand and pricing. It looks into its crystal ball and tells producers how much they can grow to meet users’ needs; it decides how much and when imports of sugar are needed; it determines the price that domestic sugar is sold. And, when supply and demand are out of alignment, the sugar-for-ethanol program kicks in.
Essentially the U.S. sugar program operates as a cross-subsidy, with consumers and taxpayers paying the bills for domestic sugar that historically has been two to three times the world price. Americans are hit with higher prices for a vast array of foodstuffs, while at the same time shouldering the cost of a massive regulatory bureaucracy.
Keeping the price of sugar at artificially high levels means that consumers pay more for these food products. And when food becomes less affordable, the poor suffer most.
Find out more from the Alliance for Fair Sugar Policy.