CBO Projects U.S. Sugar Program will Costs Taxpayers $138 Million

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Posted by James Morrone Jr on Wednesday, April 6th, 2016, 2:49 PM PERMALINK

The protectionist U.S. Sugar Program is a relic of a different time, but yet continues to cost the American taxpayer millions. The program began by setting quotas on sugar imports from around the world, in order to protect struggling farmers during the Great Depression. As global trade improved, cheaper sugar was denied entry to the American marketplace, allowing the price of sugar to rise. Today, the U.S. Sugar Program has evolved into a web of protectionist policies including import quotas, price supports, and non-recourse loans, costing Americans both jobs and millions of dollars. 

Recently, the CBO has issued a report highlighting the costs of the sugar program for the next ten years. Shockingly enough, the continued protectionist policies of the program are going to cost taxpayers at least $138 million over the next ten years. This in addition to the $3 billion in consumer costs, because of the increased price of domestic sugar, meaning that sugar farmers in the U.S. are subsidized with an estimated $700,000 per farm. This policy continues to shift an unaffordable burden on onto the backs of American taxpayers. 

Besides costing taxpayers millions every year, the program has the tendency to kill well-paying jobs. A great example of this was seen in the departure of the LifeSavers Company because of sugar costs. The company relocated to Canada because of cheaper costs of sugar and access to foreign markets, taking with them over 600 jobs. 

The American taxpayer is clearly footing the bill for the U.S. Sugar Program, a bill that is unaffordable and unfair. American sugar policy is in dire need of reforms that would allow the free market to work and drive prices down. Given the projected costs to taxpayers and consumers, it is time for lawmakers to reexamine what the Sugar Program is really achieving.

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