Carpe Diem

Will the Senate Vote to End 200+ Years of Protectionism for the U.S. Sugar Cartel? Not Today

Due to import quota restrictions that limit the amount of imported sugar coming into the U.S. at the much-lower world price, American sugar growers are protected from more efficient foreign sugar farmers who can produce cane sugar in Central America, Africa and the Caribbean at half the cost of beet sugar in Minnesota and Michigan. This sweet trade protection comes at the expense of American consumers and U.S. sugar-using businesses, who have been forced collectively to pay 29 cents per pound for domestic sugar on average since 1982 (and now closer to 50 cents), or more than twice the 14 cent average for world sugar over that period (now about 25 cents), see chart above.  How much does this trade protection cost Americans? Almost $4 billion last year, as I calculated back in January 

U.S. sugar policy has a long history, going back to 1789 when the First Congress of the United States imposed a tariff upon foreign sugar, and is a perfect illustration of trade protection that ignores the viewpoint of disorganized, dispersed consumers, in favor of the concentrated, well-organized interests of producers. And with that record of protectionism going back to the 18th century, the U.S. sugar farmers have certainly by now achieved the status of being the most successful and entrenched special interest group government-sponsored cartel in U.S. history, and the beneficiaries of the greatest coerced transfer of wealth from consumers to producers in the history of the republic.  But maybe there’s hope……

The WSJ editorial staff is reporting today that: 

For the first time in memory, there is a real chance of reining in this agribusiness welfare [for U.S. sugar farmers], which imposes a complicated system of domestic price supports coupled with domestic and import quotas that restrict the supply of lower-priced sugar.

The Senate amendment to reform this program is sponsored by Republicans Richard Lugar of Indiana and Pat Toomey of Pennsylvania and Democrats Jeanne Shaheen of New Hampshire and Richard Durbin of Illinois. They have the support of dozens of groups on the left and right, from Americans for Tax Reform to the National Wildlife Federation.

This is bipartisan cooperation that the good-government media types ought to be celebrating. Reforming Washington’s corporate welfare culture will require victories on votes like this. Senators who protect the sugar program are voting for the 0.001%.”

Update from the Coalition for Sugar Reform:
 
“Although members of the Coalition for Sugar Reform are disappointed that the Senate voted today to table the Shaheen amendment by a 50-46 vote, we are encouraged that on a bipartisan basis, nearly half the Senate clearly sees the need to debate and reform current U.S. sugar policy.

The coalition appreciates the support of 46 Senators who voted to reform U.S. sugar policy. The leadership of Sens. Shaheen, Lugar, Kirk, Toomey, Durbin, Coats and others has been outstanding, and gives us hope that the Congress will ultimately reform these outdated subsidies.”

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