On January 22, 2018, the Coalition for Sugar Reform held an event on Capitol Hill about why the U.S. needs to reform its sugar program.
Dr. Vincent Smith (AEI and Montana State University), Carson Middleton (Congresswoman Virginia Foxx), Bill O’Conner (Sweetener Users Association), Thomas Gremillion (Consumers Federation of America), and Ross Marchand (Taxpayers Protection Alliance) gave persuasive arguments on why the U.S. sugar program is hurting consumers and taxpayers.
The U.S. sugar program raises the price of sugar through four different ways. First, the federal government elevates the price by setting a minimum price for sugar. Second, the government tells the beet processors and cane mills how much sugar they can produce. Third, the United States imposes import quotas even though the U.S. needs sugar imports to meet the demand for sugar. Finally, there is a Feedstock Flexibility Program that requires the government to buy sugar surpluses and sell it to ethanol plants at a lower price.
All of these policies hurt the American consumer and taxpayer and only help a few very wealthy sugar processors.
Because of these policies, American consumers spend about $2.4 – $4 billion more every year. In addition, this program cost 123,000 American manufacturing jobs from 1997 to 2015. Finally, taxpayers have spent hundreds of millions of dollars on this program, including a nearly $259 million bail out to big sugar corporations for loan defaults in 2013.
U.S. Representatives Virginia Foxx (R-NC) and Danny Davis (D-IL) and U.S. Senators Jeanne Shaheen (D-NH) and Pat Toomey (R-PA), however, have offered a bipartisan solution: the Sugar Policy Modernization Act of 2017 (H.R. 4265/S. 2086).
This Act would reform the U.S. sugar program. First, the Act ensures that taxpayers are no longer responsible for loan defaults by large sugar processors. In addition, the U.S. Department of Agriculture would no longer have to set import quotas and would have more flexibility in administering the program. The marketing allotments and the Feedstock Flexibility Program would also be repealed.
The U.S. sugar program is the only commodity program that wasn’t reformed in the last Farm Bill. The time to reform this program is now.
Because of its negative effects on taxpayers, consumers, and small businesses, Americans for Tax Reform supports reforming the sugar program and supports the Sugar Policy Modernization Act.