The saga of sugar, subsidies, and special interests: The racket will continue

posted at 2:01 pm on June 18, 2012 by Erika Johnsen

The Department of Agriculture has long been a defender of entrenched corporate welfare and special interests, but it’s okay, because they get to hide behind handy-dandy high-minded excuses, like “We’re preserving the family farm!” or “We’re ensuring a cheap and stable food supply!” Nevermind that farm subsidies primarily benefit large and wealthy agribusiness growers of mainly just corn, cotton, rice, wheat, and soybeans, or that the USDA’s many convoluted programs often make food more expensive for consumers. It’s of course true that their government “help” is of great value to these particular niche interests, but these subsidies and services always and necessarily come at the cost of greater long-term economic growth that would benefit everyone.

The U.S. sugar industry especially enjoys one of the biggest rackets around (truly, only the federal government is capable of sheltering such a crooked system). Sugar growers are not only eligible for payouts and loans from the USDA should the price of sugar fall “too low,” but there are tariffs and import quotas that protect them from international competition and keep prices artificially high — to the detriment of American consumers.

Which is why, last week, Sen. Jeanne Shaheen (D-New Hampshire) tried to introduce an amendment to the farm bill that would have phased out federal aid to U.S. sugar growers. Sadly, nothing doing.

Unlike other crop initiatives that send farmers payments, the sugar program keeps prices high primarily by limiting imports, harming consumers and companies, Senator Jeanne Shaheen, the sponsor of the amendment, said yesterday on the Senate floor. “This outdated program puts American companies at a competitive disadvantage, and it should go,” the New Hampshire Democrat said. …

“Each and every time this amendment comes up for a vote it is rejected by Congress and we wouldn’t expect any different today,” Phillip Hayes, spokesman for the American Sugar Alliance that represents cane- and beet-sugar growers, said before the vote.

Tim Carney has a great breakdown on some of the nefarious and disheartening aspects of this continued government protection for corporate welfare.

A Government Accountability Office study in 2000, when the price gap was larger than it is today, found the sugar program cost consumers nearly $2 billion in some years. If world prices fall again — and the Organisation of Economic Co-operation and Development forecasts that they will — U.S. prices will stay high, thanks to the import quotas. American consumers will again be paying a billion or two in hidden taxes that go straight to the bottom of line of big sugar growers. …

Sugar program defenders, like Debbie Stabenow, D-Mich., chairwoman of the Senate Committee on Agriculture, Nutrition and Forestry, are correct that the sugar program creates sugar-growing jobs here in the U.S., but the Commerce Department estimated that for every sugar-grower job gained, three other jobs are lost. …

But the lobby for the sugar program is strong. Most famously, the Fanjul family in Florida, owner of Florida Crystals, are deeply embedded in Washington politics. Over the last three elections, the Fanjuls have given more than $1.8 million to federal candidates and political action committees, according to data from the Center for Responsive Politics.

The amendment had plenty of bipartisan support, but also bipartisan opposition, and the Senate vote went 50-46 against it. Even Sen. Marco Rubio voted in favor of big sugar. Sad face.


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Under the Commerce Clause, Obamuh can do what he will, regarding sugar.

Wasn’t that the point of ObamuhCare?

OhEssYouCowboys on June 18, 2012 at 2:04 PM

Sugar!! The First Lady will have something to say about that.

Drained Brain on June 18, 2012 at 2:07 PM

In related news, doggy glitter gets a share of farm bill billions.

steebo77 on June 18, 2012 at 2:07 PM

Why is this country full of fat, obese slobs? Read the above.

We complain abut welfare…..corporate welfare is worse.

rickyricardo on June 18, 2012 at 2:12 PM

Even Sen. Marco Rubio voted in favor of big sugar.

Cane

Schadenfreude on June 18, 2012 at 2:13 PM

I don’t get this. Why can Teh One just make the sugar thing disappear and create Splenda farms, skittles factories, and unicorn ranches eerywhere so everyone has a job?

HomeoftheBrave on June 18, 2012 at 2:13 PM

What the hell good is Rubio if he supports stuff like this?

Intrepid767 on June 18, 2012 at 2:13 PM

eerywhere = everywhere

HomeoftheBrave on June 18, 2012 at 2:13 PM

Always expect to be betrayed, by the right.

Schadenfreude on June 18, 2012 at 2:14 PM

The leftists and the rightists aim to destroy small farms in the U.S. and in the EU. It’s all documented and in front of your eyes.

They are both tyrannical socialists, stuffing their own pockets, at your expense.

Schadenfreude on June 18, 2012 at 2:16 PM

In related news, doggy glitter gets a share of farm bill billions.

steebo77 on June 18, 2012 at 2:07 PM

is glitter considered a spice or condiment?

Ditkaca on June 18, 2012 at 2:17 PM

is glitter considered a spice or condiment?

Ditkaca on June 18, 2012 at 2:17 PM

I hear that Obama likes to incorporate it in his puppy meat marinades.

steebo77 on June 18, 2012 at 2:21 PM

There is a state that used to have lots of sugar production that doesn’t anymore. And it’s a state that is most readily amenable to sugar production. That state used to also be very heavily used for tropical fruit production, specifically pineapples (a multiple-year endeavor for the plant).

Aloha! Mahalo nui loa.

Leftism killed it. Fuel taxes, excise taxes, regulations, etc. And, I think, excise taxes are the worst form of hidden taxes. I believe it was Hot Air’s own Hawai’ian Kini that explained that to me. Hawai’i doesn’t have a sales tax per se, but rather an excise tax, which is levied at every single level of production. By the time the final product reaches the actual consumer market, it has already been excise taxed multiple times, meaning production-and-refining intensive products such as agriculture can have in the neighborhood of half its cost be the added taxes.

John Hitchcock on June 18, 2012 at 2:22 PM

It’s about corn too. Corn is subsidized to make “high fructose corn syrup” cheaper than the artificially high priced sugar.

If sugar was allowed to find its natural price point, the high fructose corn syrup market would evaporate, and that would make big corn sad.

Rebar on June 18, 2012 at 2:23 PM

The don’t call the fed govt “Uncle Sugar” for nuttin’.

NoDonkey on June 18, 2012 at 2:23 PM

The Supplemental Nutrition Assistance Program (food stamps) is 60% of the USDA buget.

davidk on June 18, 2012 at 2:24 PM

And oh, by the way, Hawai’ian soil is among the most naturally nutrient-rich soils in the nation, if not the absolute most nutrient-rich. But the Leftist cost of doing business in Hawai’i is too great a burden to make heavy “exotic” “tropical” agriculture a worthwhile endeavor for anyone interested in a sustainable business venture.

John Hitchcock on June 18, 2012 at 2:28 PM

Erika -

Just wanted to take this opportunity to say what a great job you’re doing.

You’re far more conservative than HA’s “Esteblishment Republican” and the last of the Rockerfeller Republicans.

bw222 on June 18, 2012 at 2:28 PM

sick and tired of this… but congress dem and republican are not.. Why I thought that Rubio was a small gov’t/free market type, guess not…. so far very disappointed in him for his stand on state health mandates (Romney endorsement), sugar subsidies and making legals out of illegals… yikes…

kringeesmom on June 18, 2012 at 2:31 PM

Sugar!! The First Lady will have something to say about that.

Drained Brain on June 18, 2012 at 2:07 PM

Yeah, she’ll say we need to inflate the price of sugar to make it too expensive for people to use, hence helping solve the obesity problem.

The Rogue Tomato on June 18, 2012 at 2:32 PM

Erika cuts to the bone. Me gusta.

antisense on June 18, 2012 at 2:32 PM

Mary (Landrieu) quite contrary, how does your (sugar) garden grow?

Steve Z on June 18, 2012 at 2:34 PM

Unfortunately, it is no longer just Big Sugar that twists the politicians’ arms to maintain the sugar tariffs and price supports. It is now Big Corn as well. If sugar prices fall, there goes the market for high fructose corn syrup, which accounts for over half of all corn usage now. Archer Daniels Midland is one of the biggest manufacturers of HFCS. Its tentacles and lobbying power far exceed that of the Fanjul family.

rockmom on June 18, 2012 at 2:42 PM

Good job, Erika.

I like the variety of issues and your insight that you bring to the table.

davidk on June 18, 2012 at 2:43 PM

I work in Sugar Land, TX. There used to be a huge sugar mill here with lots of sugar cane growing in the area. I guess the Kempner family didn’t play the game because there is no cane being grown and the plant is being torn down right now after sitting adle for years.

The rice and corn farmers in the county to the south all have new trucks though.

DanMan on June 18, 2012 at 2:44 PM

John Hitchcock on June 18, 2012 at 2:22 PM

Thanks John. I wondered why I can never find any pineapple, canned or fresh, from Hawaii.

Brat on June 18, 2012 at 2:44 PM

Even Sen. Marco Rubio voted in favor of big sugar. Sad face.

Florida heap big sugar state. Marco Rubio heap big politican who advocates for his constituents

Ann on June 18, 2012 at 2:47 PM

I think it’s time for a post that allows debate about protectionist tariffs and import quotas. I can’t definitively claim that they’re always a bad thing.

blink on June 18, 2012 at 2:35 PM

I cannot remember if it was a cynical view of the Japanese system or Chinese system that I saw some years back, but I like it nonetheless. Even though it is very BigGovernmentesque, and I hate Big Government. For the sake of discussion, let’s decide it was Japan (so I can paint the word-picture more succinctly).

Japan has a major problem with the US on some matter. The US exports lettuce to Japan. Japan decides to allow US imports of lettuce to enter Japan through a single port of entry, and provides only one lettuce import inspector. By the time that one inspector gets to each cargo container of lettuce, that lettuce has already spoiled and become rotten. The inspector appropriately rejects that container. Very quickly, the US and Japan resolve their differences in such a way as to make Japan happy and to allow the lettuce farmers to successfully export their lettuce to Japan.

The same can be done for US imports of agriculture. Pick a single port of entry (the least amenable environment for said agricultural product). Assign a single inspector to inspect it all prior to allowing it to leave the dock. No need for tariff wars if the product is spoilt before being inspected.

But it’s high stakes poker, that. And it’s a reactionary measure, rather than a proactive measure.

John Hitchcock on June 18, 2012 at 2:48 PM

Erika Johnsen

…I’m liking her!

KOOLAID2 on June 18, 2012 at 2:49 PM

The research shows that from 1995 to 2010, $16.9 billion in federal subsidies went to producers and others in the business of corn syrup, high fructose corn syrup, corn starch and soy oils.
http://articles.latimes.com/2011/sep/23/business/la-fi-junk-food-subsidies-20110923

Over 10% of the ag budget.

From the same article:

Taxpayers in the San Francisco area spend $2,762,295 each year in junk food subsidies, but only $41,950 each year on apple subsidies. In Los Angeles, taxpayers spent $13,010,286 in junk food subsidies, and $201,291 on apple subsidies, according to the report.

Obesity, anyone?

davidk on June 18, 2012 at 2:50 PM

And oh, by the way, Hawai’ian soil is among the most naturally nutrient-rich soils in the nation, if not the absolute most nutrient-rich. But the Leftist cost of doing business in Hawai’i is too great a burden to make heavy “exotic” “tropical” agriculture a worthwhile endeavor for anyone interested in a sustainable business venture.

John Hitchcock on June 18, 2012 at 2:28 PM

With one exception, of course, Hawaiian coffee. But that is a high ticket item, with the quality of the product setting the price, especially on the Big Island, where the A-1 Kona comes from. Ironically, the largest coffee plantation in the US is located on Kaua’i-on land where they used to grow sugar cane. The overall quality of that coffee is nowhere near as good as Kona (except for their gourmet blends) because they machine-harvest their mainstream coffee beans instead of picking them by hand like they do in Kona.

Now that the sugar cane and pineapple crops are pretty much gone from Hawai’i (they still do grow pineapples on Mau’i) the leading agricultural businesses are those growing “non-tropical” crops; in fact there’s a big business for growing assorted gourmet salad greens for the high-end restaurants out there.

Del Dolemonte on June 18, 2012 at 2:51 PM

John Hitchcock on June 18, 2012 at 2:22 PM

Thanks John. I wondered why I can never find any pineapple, canned or fresh, from Hawaii.

Brat on June 18, 2012 at 2:44 PM

You can still get pineapples grown on Mau’i. But they’re not cheap.

$30 apiece, or 2 for $45

Del Dolemonte on June 18, 2012 at 2:55 PM

This is where the Bully Pulpit comes in.

No, I’m not holding my breath.

ConservativeLA on June 18, 2012 at 2:57 PM

Thanks John. I wondered why I can never find any pineapple, canned or fresh, from Hawaii.

Brat on June 18, 2012 at 2:44 PM

If I remember right, it takes 3 years for a pineapple plant to produce a pineapple that can be sold on the market. And the pineapple is the reason why it is illegal to bring a hummingbird to Hawai’i. If you look at a pineapple, its surface is a whole bunch of square segments. You can see where flowers used to be. Those flowers are only accessible by hummingbirds, and are very attractive to hummingbirds. And if a hummingbird finds it, the pineapple is finished, destroyed. Thus, no hummingbirds.

Dole used to produce lots of pineapples in Hawai’i for export to the mainland and to other countries. They no longer do. But they maintain their tourist attraction on O’ahu, and I highly recommend visiting it, if only for their pineapple-shaped “largest maze in the world”. You can also learn what it takes to produce a single pineapple. It’s extraordinarily labor-intensive. And it’s a multi-year endeavor. Very educational.

(And I still would love to find a way to move there, despite my dire financial condition and the outrageous expense of living there. I love Captain Cook’s live theatre, and the people of Hawai’i. But I hate the politics and the artificially high expense of living there.)

John Hitchcock on June 18, 2012 at 3:07 PM

With one exception, of course, Hawaiian coffee. But that is a high ticket item, with the quality of the product setting the price, especially on the Big Island, where the A-1 Kona comes from. Ironically, the largest coffee plantation in the US is located on Kaua’i-on land where they used to grow sugar cane. The overall quality of that coffee is nowhere near as good as Kona (except for their gourmet blends) because they machine-harvest their mainstream coffee beans instead of picking them by hand like they do in Kona.

I bought a largish bag of Kona coffee for my brother. I forget the term for the pea-beans which are the premium beans. But “Kona blend” coffee uses a portion of those very select beans. It’s dark, very rich, the absolute best on the market. And it’s cheaper to buy it in Hawai’i and have it FedExed to family on the mainland than it is to buy it on the mainland. My brother, who spends a fortune per pound for his coffee (he hates the Kroger “special blends” because they’re cheap substitutes for “real” coffee) absolutely praised the Kona beans I sent him.

And Hawai’i is the only state that produces nutrient-rich virgin soil in any measure. If only Leftism were killed in Hawai’i, that state would be sitting on an agricultural gold mine.

John Hitchcock on June 18, 2012 at 3:15 PM

The USDA: making up regulations and paying Big Ag to make sure you don’t get cheap food.

It isn’t the subsidies that are the problem.

It is having a USDA in the first place that is the problem.

ajacksonian on June 18, 2012 at 3:22 PM

Del Dolemonte on June 18, 2012 at 2:55 PM
Where? Only in Hawaii or on the west coast, or do they export at all now? I can’t find any here (Atlanta area).

John Hitchcock on June 18, 2012 at 3:07 PM
I know how hard it is to grow pineapples – I actually grew 3 a few years ago. It was fun! Started them from the leafy tops. Had to put the plants in plastic bags with rotting apples to produce ethylene gas which prompts the plant to produce the fruit. The pineapples were delicious!!
BTW I’m a “coffee snob” too – like it very rich and strong. The best 100% Kona I’ve had was from Gevalia many years ago. But recently it was not very good and I stopped buying it.

Brat on June 18, 2012 at 3:32 PM

now that the President is not obligated to enforce laws, he can ignore these sorts of things entirely and simply refuse to pay

MTF on June 18, 2012 at 4:10 PM

Party of Lincoln + Party of Roosevelt= corruption, big government and big business.

Malachi45 on June 18, 2012 at 4:33 PM

It’s not the sugar industry that’s behind all the import quotas and price supports for sugar.

It’s the corn industry, especially Archer Daniels Midland. The real purpose is to make it so that sugar is more expensive per serving than corn sweetener.

Steven Den Beste on June 18, 2012 at 5:08 PM

Del Dolemonte on June 18, 2012 at 2:55 PM
Where? Only in Hawaii or on the west coast, or do they export at all now? I can’t find any here (Atlanta area).

Brat on June 18, 2012 at 3:32 PM

The link I posted will ship the Mau’i pineapples to you via FedEx. That’s why they cost so much.

As for the coffee, when I was in Jamaica a few years ago I was turned on to their Blue Mountain. Even better than Kona IMHO. Sadly, the Japanese have driven the price up so much that 90% of the annual harvest goes to them. But it’s well worth seeking out if you’re a java junkie.

And Hawai’i is the only state that produces nutrient-rich virgin soil in any measure. If only Leftism were killed in Hawai’i, that state would be sitting on an agricultural gold mine.

John Hitchcock on June 18, 2012 at 3:15 PM

Maybe, maybe not. After all, the landowners have to decide what the most “valuable” use of their land will be (assuming that they own the land in the first place; much of Hawai’i is comprised of leasheold land). If they do own it, they might find that the most profitable use for the land is not for agriculture, but for residential development or for resorts and golf courses. In fact, much of the old pineapple land on O’ahu up between Pearl Harbor and the North Shore has been turned into tract subdivisions.

Del Dolemonte on June 18, 2012 at 5:10 PM

Del, you appear to be very well versed in topics related to Hawai’i. Your moniker suggests a tropical locale. Are you also Hawai’ian? I’d love to find a way to move to the Big Island and survive at the same time. It is a dream of mine. Could you possibly help me achieve that dream? (Best bet for personal contact is to comment on one of my own TBD articles, since I’m having issues with my publicly declared email addy.)

John Hitchcock on June 18, 2012 at 5:41 PM

Even Sen. Marco Rubio voted in favor of big sugar. Sad face.

Another day, another moron.

Let’s move on and see what tomorrow brings.

Mcguyver on June 18, 2012 at 6:29 PM

I read this is a five-year Agricultural bill? So this would prevent a future President Romney from addressing cutting the massive Federal government with agricultural spending? Wonderful. Republicans suck too.

waelse1 on June 18, 2012 at 9:13 PM

Preserving the family farm, is not high mind. Family farmers are no more deserving of “corporate” wellfare whether they are incorporated or not.

burt on June 18, 2012 at 10:16 PM

Burt, it is the family farmer that is hit with all the massive regulations and the massive corporate farmers that get all the waivers on those massive regulations.

It’s called “pay to play”, “crony capitalism”, “Chicago politics”, “corruption”, “influence peddling”, etc.

John Hitchcock on June 18, 2012 at 11:03 PM