America vs. the Sugar Lobby


On Wednesday, the Senate voted not to tamper with the Depression-era program that protects U.S. sugar growers.  It’s not often conservatives and liberals, Democrats and Republicans, pro-growth conservative groups and the Teamsters agree on something.  In fact, it’s almost unheard of.  But when it comes to the federal government’s sugar program – one of the most egregious corporate welfare handouts in a long list of wasteful programs – these strange bedfellows have found common ground. 


For years, the federal government has kept the price of sugar high by capping domestic production, imposing a de facto government price floor, and mandating that U.S.D.A. buy excess sugar to sell to ethanol producers at a loss. The U.S. government also places exorbitant restrictions on sugar imports.  The cumulative effect of all these special protections is an artificial increase in the price of sugar for Americans relative to other countries.

As a result, American consumers pay more for products containing sugar, and U.S. manufacturers of sugar consuming products are at a competitive disadvantage.  Not surprisingly, many of these manufacturers have closed their doors or moved their factories to Canada and Mexico where sugar costs less than half the price.  The Department of Commerce agrees, finding that for every one job protected by the sugar program, three others are lost in sugar using manufacturing industries. 


This week, Congress had an opportunity to roll back many of the sugar program’s excesses.  Co-sponsors Sen. Jeanne Shaheen (D-N.H.) and, Sen. Pat Toomey (R-Pa.) offered two amendments to the 2012 farm bill targeting the wasteful sugar program. 

The first would eliminate the sugar program completely.  In a rare demonstration of bipartisan common-sense, this amendment almost survived a tabling motion last week by a margin of just four votes.  This week, the Senate will vote on an alternative amendment that will reform the sugar program rather than eliminate it.  While this measure does not go as far as it should, it will still save taxpayers $72 million, help bring down the price of sugar and save American jobs.  Perhaps most importantly, it will finally begin to weaken the stranglehold the sugar lobby has on American consumers and our tax dollars. 

Only a handful of senators needed to change their votes in order to pass this historic reform.  But in a 53-46 vote, the Senate defeated the amendments to the $500 billion farm bill.  Supporters of the sugar program included senators from Northern and Western sugar beet states and Southern sugar cane states—no surprise there.  The primary defense of the sugar program is that it does not cost taxpayers anything and that consumer sugar prices remain lower than those in other developed countries.  (On Friday, the world sugar bulk price for #11 raws was trading at $20.35.  The domestic raw sugar price is trading at $28.85)