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 “This outdated program puts American companies at a competitive disadvantage, and it should go,” the New Hampshire Democrat said.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.
Breaking on Hot Air