Big Sugar Leaves a Bitter Aftertaste
29th January 2015
Taking candy from a baby is easy. Taking sugar from a senator? Not so much. For decades, economists, free market think tanks, good-government advocates, newspaper columnists, and even the occasional elected official have decried the special treatment enjoyed by the American sugar industry.
Under current policies, U.S. sugarcane and sugar beet farmers receive minimum price guarantees regardless of market conditions. In addition, the federal government allots 85 percent of the U.S. sugar market to domestic producers, and it imposes quotas and tariffs on the 40 countries that are allowed to export sugar to America.
In 1993, the Government Accounting Office (GAO) estimated that such policies were costing U.S. consumers $1.4 billion a year because they resulted in “higher prices for domestic sugar.” Twenty years later, the University of Michigan–Flint economist Mark J. Perry estimated that this annual cost had grown to $3 billion by 2012, and that consumers and U.S. sugar-using businesses had paid “more than twice the world price of sugar on average since 1982.”
In other words, sugar producers are getting a sweet deal, while consumers are getting screwed.