Sugar in the U.S. costs nearly twice as much as elsewhere in the world, raising prices for candy, baked goods, ice cream and more. The reason is no mystery. A government farm-subsidy program in effect since the 1930s blocks cheaper imports and controls the price and quantity of sugar in our marketplace. As in the days of Soviet central planning, the program benefits a few at the expense of the many.
The main culprits? A small group of domestic sugar processors, sugar cane growers in Florida, Louisiana and Texas, and sugar beet producers in a handful of mostly northern states. Lining the pockets of this wealthy, politically connected pressure group costs U.S. consumers at least $2.4 billion at the grocery store each year.
Someday, the price-gouging must stop, and reformers have high hopes for the 2023 Farm Bill — the federal farm and food policy legislation that comes up for renewal every five years. Voters are justifiably angry about the high cost of food, and no doubt would support eliminating a hidden tax that assaults bedrock principles of capitalism and fair trade.
But change will only happen over the objections of politicians (like Florida’s GOP Sen. Marco Rubio) who’ve taken six-figure campaign contributions from Big Sugar. So have many other politicians on both sides of the aisle.
For decades, the sugar lobby has splashed out megabuck donations to perpetuate its government-sponsored rip-off.
The current version of the U.S. sugar program, established in 1981, directs the Agriculture Department to guarantee higher prices for farmers by limiting supplies through production quotas, while restricting and taxing imports. A “loan” program funnels payments to domestic processors, who can pay back the funds in sugar. The government also buys any “surplus” that might weigh on prices and directs it to another politically favored group: companies that turn sugar into ethanol fuel.
This system is a tour de force of anticompetitive corporate welfare and the fact that it’s still being used to stiff consumers shows the power of single-minded lobbying.
The 2008 and 2018 farm bills arguably made the program even worse for shoppers and food manufacturers. Some companies, including Coca-Cola and Pepsi, long ago reformulated many of their U.S. products with corn syrup to sidestep the sugar gouging. That’s why many consumers prefer Mexican Coke.
Consumers would benefit from letting a freer market prevail, and the industry would get more competitive, as it did in Australia, which ended sugar subsidies years ago and still produces huge quantities at world-market prices.
The leaders of the House and Senate Agriculture committees overseeing the 2023 Farm Bill are thought to be less beholden to the sugar cartel than some of their predecessors, and less caught up in distracting disputes over immigration policy. Food manufacturers make up a strong constituency, operating in every state, and they’re expected to seek changes to the program that would allow more imports and bring prices down.
They might not care, however, if Congress finds new ways to pay off its sugar daddies, at taxpayer expense. We urge the political forces gathering for the Farm Bill to make 2023 the year that Big Sugar finally gets told “No!”
Chicago Tribune/Tribune News Service
