yup, the right is all for the free market EXCEPT when it works
Its not a sexy issue. Indeed, with last weeks passage of the farm
bill, little can be done about it now, but the inequity, audacity and
hypocrisy associated with the politics of sugar cry out for comment.
The U.S. sugar program is a collection of import restrictions, price
floors and taxpayer-backed loans designed to prop up some 4,500 domestic
sugar growers while costing everyone else billions in higher prices,
lost jobs and preposterous bailouts.
Its the most constrained and lucrative subsidy in the entire farm
bill, Rep. Jackie Speier, D-Hillsborough, told me.
The Bay Area Democrat was one of 20 in Californias congressional
delegation favoring a House amendment to overhaul the sugar subsidy.
Among Sacramento-area members, only Democrat John Garamendi and
Republican Tom McClintock supported the amendment. Minority Leader Nancy
Pelosi and Republican Minority Whip Kevin McCarthy opposed it.
Countless food products use sugar. Eighty-five percent of the sugar that
food manufacturers use for their products is grown here even though,
from 2000 to 2012, the average price of domestic sugar was more than
double the worldwide average.
Couldnt you use more foreign sugar and cut production costs? Nope.
Federal rules have restricted sugar imports to 15 percent since 1981.
Before that, sugar imports accounted for half the U.S. market.
That import absolutely guarantees that all consumers and businesses
using sugar will pay more money, Speier said. Almost $3.5 billion
Who controls this price-control contrivance? Big Sugar.
Although sugar products comprise only 1 percent of total domestic crop
production, the sugar industry accounts for 35 percent of all lobbying
expenditures by crop producers, according to the Center for Responsive
Politics: $8 million in 2012 and nearly $42 million since 1990,
including more than $16 million by the industrys most powerful
producer, the Fanjul family, which controls 40 percent of Floridas
sugar crop. The Fanjuls own Domino and C&H Sugar and operate refineries
in multiple states, including California.
Gee, if only those food stamp takers could afford such an investment.
For decades, the Fanjuls, along with sugar cane and sugar beet producers
in a dozen-plus states, have cultivated quite the caucus to protect
their profits: lawmakers in both sugar and non-sugar states cooed by
campaign contributions, corn farmers profiting from expensive sugar by
selling cheaper high-fructose syrup to food producers trying to cut
costs, and labor unions fearful of sugar jobs going overseas.
If you asked your congressman how much the sugar subsidy costs his
constituents, he wouldnt have a clue, UC Davis agricultural economist
Daniel Sumner told me.
Do constituents know? Most wouldnt know we had a sugar program,
The sugar industry claims its subsidy is cost-free. Various federal
studies show otherwise:
For each sugar-growing job saved through higher U.S. sugar prices,
nearly three confectionery manufacturing jobs are lost.
Higher domestic sugar costs are forcing American companies to
relocate their factories abroad. Between 1998 and 2011, the United
States saw a 22 percent drop in confectionery-manufacturing employment,
and a nearly 8 percent drop in food-manufacturing employment. For
perspective: Total number of Americans employed in the sugar industry:
61,000. In industries using that sugar: 988,000.
42 percent of all sugar subsidies go to just 1 percent of sugar
Bob Simpson, COO of Jelly Belly in Fairfield, where sugar is half the
production cost, told me: There are 92,000 sugar use-related jobs in
California. There are less than 2,000 jobs in California related to
sugar production. Its crazy that they can leverage what little they
have in people who make sugar compared to people who buy sugar.
Theres more. NAFTA allows for Mexico to sell its sugar here. A 2013
bumper crop forced U.S. sugar prices to drop 18 percent. Good! you
say. Except Washington spent more than $300 million in tax dollars to
buy back 300,000 tons of sugar from domestic producers and take it off
Why the bailout? Prices fell to where sugar producers couldnt pay back
federal loans they received in 2012. (Washington makes loans to sugar
processors annually as part of a program dating back to the 1934 Sugar
So even with limited international competition, Big Sugar still wins; we
lose. Government buys back sugar at a loss, hoping to raise sugar prices
for citizens. Politicized capitalism at its finest.
I wonder if all those congressional ballyhooers of free-market
capitalism know that the Fanjuls want to expand in Europe. Europes
trade barriers prevent this, but the Fanjuls are asking the European
Union to lower those barriers. I see. They dont want foreign
competition here but they want Europe to allow foreign competition
there. Not exactly a two-way street, is it? Neither is the sugar
program, but with passage of the farm bill, were stuck with it for at
least another five years.
Bet I know what the sugar cartel is saying about us: Let them eat cake.
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