SUGAR Act Would Phase Out U.S. Sugar Program

by Fran Smith on January 27, 2011

in Agenda for Congress, Agriculture, CEI Projects

Sweet news on the sugar front. Senator Jeanne Shaheen (D-NH) and newly elected Senator Mark Kirk (R-IL) have introduced a bill to phase out the U.S. sugar program. Called the SUGAR Act (Stop Unfair Giveaways and Restrictions), S. 25 would reform one of the most egregious agricultural programs that raises food costs for consumers, leads to job losses in confectionery and related businesses, and harms developing countries’ competitiveness.

Sugar producers defend the program by bragging that it doesn’t cost the federal government. But their sly defense ignores the estimated $4 billion a year added costs to consumers through a program that guarantees a minimum price to sugar producers, restricts the domestic supply, and sets a quota system for imported sugar, with prohibitively high tariffs above the quota.

Senator Shaheen’s press release noted:

Currently, no other U.S. crop is subject to similar restrictions, making the current price supports an unfair deal for consumers. Plus, high sugar prices were responsible for the loss of 112,000 jobs lost in sugar-using industries between 1997 and 2009, according to Promar International, a food and agriculture consulting firm. A 2006 Department of Commerce study estimated that for every sugar growing job saved through high U.S. sugar prices, approximately three manufacturing jobs are lost.

The legislation has not yet been posted.

More news on sugar: Opposition to the sugar program looks like it’s mounting. There’s also another sugar reform bill in the works that aims to repeal the program. And, with the new Congress, it has a better chance for success. See CEI writings here and here about the sugar program during the debates over the 2008 Farm Bill, which made a bad program even worse.

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