U.S. Sugar Program
The U.S. sugar program is a bad deal for American food and beverage manufacturers and the hundreds of thousands of workers they employ.
Unlike other commodity programs, the sugar program involves the federal government restricting imports to keep domestic prices high and mandating marketing allotments to restrict domestic production.
This unnecessary government intrusion has cost American consumers $3 billion per year and has contributed to the loss of 123,000 American manufacturing jobs over the last 18 years – all to benefit a few extremely wealthy sugar processors.
Here’s what makes the U.S. sugar program a bad deal for America:
- Price supports, which enforce a minimum price for sugar in the U.S. domestic market. This makes the domestic price higher than the world market price.
- Marketing allotments, which are aimed at preventing surplus supplies in the domestic market. Each beet and cane processor is under a government-imposed and legally-binding limit on the amount of sugar it is permitted to sell each year.
- Import quotas (also called Tariff-Rate Quotas, or TRQs) set limits on how much sugar can be shipped to the United States every year from each of the 40 countries that exported sugar to the United States 35 years ago. Imports above this level are subject to an extremely high tariff.
- The Feedstock Flexibility Program, established in 2008, mandates that in times of surplus, the government must buy sugar and resell it to ethanol plants at a loss. This comes at the expense of taxpayers, who as consumers are already paying more for sugar than they should. NOTE: The program was used for the first time in fiscal year 2013. For more information, see the USDA fact sheet below.
Congress should reform the sugar program in the 2018 Farm Bill to ensure it balances the interests of sugar producers with the needs of American manufacturers, workers and consumers.
For more information on the U.S. sugar program and the need for reform, visit the Alliance For Fair Sugar Policy at fairsugarpolicy.org.