Friday, April 01, 2011

Sen. Lugar Wants to End America's Sugar Cartel: "It's A Job-killing, Market-Distorting Monstrosity"

The chart above shows that U.S. sugar prices have averaged twice the world price (28.1 cents per pound vs. 14.4 cents) since 1980 (data here), because of tariffs and quotas that restrict the amount of foreign sugar allowed to enter the U.S. and thereby protect domestic beet sugar producers against more efficient foreign producers of sugar cane.  I've estimated before that our sugar policy cost U.S. consumers of sugar $2.5 billion in 2009 and $4.5 billion in 2010.  

Senator Richard Lugar (R-Indiana) has introduced the "Free Sugar Act of 2011," which would "free Americans from government control of sugar prices," and "create a free market in sugar, free small businesses and consumers from paying government-inflated food prices, and free sugar producers from the commands of Washington."

Here's a recent op-ed by Sen. Lugar in the Washington Time titled "Sweet Deal for Big Sugar," where he writes:

"Our sugar policy imposes a hidden tax of billions of dollars annually on consumers and businesses and has destroyed thousands of U.S. manufacturing jobs. It substitutes the federal government for the private sector in basic decisions about buying and selling, supply and price.

This sweet deal for sugar producers is a sour one for consumers. Food and candy manufacturers are prominent victims, but also hurt are hundreds of thousands of small businesses, including bakeries, confectioners and restaurants. It makes no sense to place extra costs on small businesses, the main engines of job growth."

HT: Matt Bixler

25 Comments:

At 4/01/2011 10:27 AM, Blogger Buddy R Pacifico said...

How long has the U.S. government protected U.S. sugar producers?

Since 1816.

In the 1820s this argument was employed: "Protectionists warned that if sugar tariffs were lifted, then the value of slaves working on the sugar plantations would collapse — thus causing a general fall in slave values throughout the South."

Two hundred years of tariffs, and non-tariff barriers such as quotas, is ample time for sugar protection to expire.

 
At 4/01/2011 11:23 AM, Blogger Benjamin said...

Add in ethanol to the sugar-butt crowd.

The most enfeebled, molly-cpddled, knock-kneed weakling on Earth is the American rural economy.

The rural highways, water systems. phone systems, crops, power systems and mail service are all federally subsidized.

$8 billion a year in phone subsidies alone. Every year and growing.

Even the federalized defense industry has become lard-patronage for rural districts.

Since 1816 the sugar-butts have had the federal braces to stand up in.

When it cmes to rural America, it is always federal sugar-butt day.

 
At 4/01/2011 12:52 PM, Blogger Bruce Hall said...

http://rheumatic.org/sugar.htm

http://circ.ahajournals.org/cgi/content/full/106/4/523

http://www.sciencedaily.com/releases/2007/11/071108171604.htm

Perhaps the government is doing us all a favor by keeping the price of sugar inflated... sort of like tobacco.

 
At 4/01/2011 12:55 PM, Blogger Che is dead said...

The average farmer receives almost nothing in the form of farm subsidies. In fact, urban dwelling leftists are far more likely to receive the benefit of farm subsidies through their investments than the farmers themselves.

"Between 1995-2009, taxpayers shelled out $246.7 billion dollars in agriculture subsidies. Sixty-two percent (62%) of American farmers received no subsidy at all. These no-subsidy farmers and ranchers are primarily small operators grossing under $250,000 a year on their farms. In other words, these are family farmers that fit the idea most Americans have of farmers."

"Nationally, ten percent (10%) of "farmers" received 74% of all subsidies, or $183.25 billion of the total $246.7 billion allotted. The bottom eighty percent (80%) of farmers who received a subsidy got on average, $572.00 dollars."

Carroll County News

So, "Benji", If you're looking for someone who is "enfeebled, molly-cpddled, knock-kneed weakling", you need look no further than the closest mirror.

 
At 4/01/2011 1:09 PM, Blogger Che is dead said...

I agree with ending argricultural subsidies and trade protectionism, but it's important to understand where the U.S. stands in relation to other countries. We have some of the lowest agricultural tariff rates of any country in the world, approximately 12 percent, while our agricultural exports face tariffs averaging about 60 percent. That is why entering into free trade agreements is so important.

 
At 4/01/2011 2:07 PM, Blogger Che is dead said...

"Benji",

It seems that in 2008 your Democrat friends, who controlled every branch of the federal government, made it more difficult to determine who is actually receiving farm subsidies. Now why would they do that?

USDA pulls plug on some farm subsidy data

 
At 4/01/2011 2:13 PM, Blogger Che is dead said...

"Two-thirds of all farm subsidies are distributed to the wealthiest 10 percent of farmers. The U.S. Department of Agriculture reports that farmers on “large” and “very large” farms—the types that receive the bulk of the subsidies—report an aver­age household income of more than $135,000. Are these the “poor family farmers” lawmakers are talking about?"

"It gets worse: 78 farms received over $1 million in subsidies in 2002. The $110 million received by Riceland Foods that year was more than Washing­ton gave to every farmer in 12 states combined. Not to be outdone, a dozen Fortune 500 compa­nies—including John Hancock Mutual Life Insur­ance, Westvaco, Chevron, and Caterpillar—have pocketed farm subsidies as much as 510 times larger than the amount received by the median farmer. Farm subsidy checks are also sent to celeb­rity “hobby farmers” such as David Rockefeller, Ted Turner, Scottie Pippen, and former Enron CEO Ken Lay."

Heritage Foundation

 
At 4/01/2011 2:58 PM, Blogger Che is dead said...

This comment has been removed by the author.

 
At 4/01/2011 2:59 PM, Blogger Che is dead said...

Republicans to revoke EPA's authority to regulate CO2; move to do away with a tax credit for ethanol farmers.

Hope and Change

 
At 4/01/2011 4:11 PM, Blogger Benjamin said...

She is dead-

So what that federal subsidies go to rich and large farmers? They are still subsidies.

And all farmers benefit from the 8,000 agricultural extension agents, provided free of charge.

And all farmers benefit from federally subsidized roads, water systems, phone systems, mail service, power systems, airports and railroad stops.

Rural America floats on top of a pool of federal lard.

Rural states get back $1.50 or more for every dollar they send to DC. They each have two Senators (despite small populations) to keep the lardtrains coming.

If we could shove Alaska and rural states out of the union, we would not run a federal deficit.

Rural America has become a parasite on the hardworking, taxpaying Americans in other regions.

 
At 4/01/2011 4:18 PM, Blogger Dr. T said...

Another affect of the sugar tariff is that many food and beverage producers substitute high fructose corn syrup for sucrose. Millions of bushels of corn are used to make ethanol and sweeteners. This drives up the price of corn. Due to federal policies, we pay 100% more for sugar, at least 33% more for corn, and our sweet tooths suffer when corn syrup replaces sugar. Bad pun alert: This leaves a sour taste in my mouth.

 
At 4/01/2011 4:42 PM, Blogger Dr. T said...

@Benjamin: "...The most enfeebled, molly-cpddled, knock-kneed weakling on Earth is the American rural economy."

I grew up in farm country in upstate New York. The only farm product in the region that received support was milk. Despite the support, almost all the small dairy farms in upstate NY had failed by 1980. (Again, it's the biggest farms that benefit from subsidies and price controls.)

Farm animals raised without subsidies: pigs, sheep, goats, horses, rabbits, chickens, ducks, turkeys, geese, etc.

Crops raised without subsidies: potatoes, radishes, onions, turnips, carrots, beets, melons, cucumbers, squashes, pumpkins, beans, peas, lettuce, cabbage, Brussels sprouts, egg plants, tomatoes, peppers, sunflowers, hay, walnuts, hazelnuts, chestnuts, berries, grapes, cherries, apples, pears, plums, and Christmas trees. We also grew corn, wheat, and other grains, but not in large enough quantities to qualify for subsidies.

----------

"The rural highways, water systems. phone systems, crops, power systems and mail service are all federally subsidized.

$8 billion a year in phone subsidies alone."

Farm areas in the east do not get those subsidies (that mostly go to sparsely populated areas such as Nebraska, Wyoming, Montana, Kansas, the Dakotas, etc. Today, almost no rural phone systems are getting federal money: the money from that outdated tax just goes into general revenues.

 
At 4/01/2011 5:37 PM, Blogger Ron H. said...

Although I applaud Sen. Lugar for his market friendly action, as far as I know, sugar beets aren't a significant crop in Indiana.

He can take courageous action without risk of losing votes.

 
At 4/01/2011 6:23 PM, Blogger Benjamin said...

Dr. T-

Fine, then you have no problem with eliminating the USDA entirely, and wiping out all other rural subsidies as well, since they are not important.

F.C.C. to Propose Expanding Broadband Service to Underserved Areas
By EDWARD WYATT
Published: February 6, 2011

WASHINGTON — The Federal Communications Commission on Tuesday will propose the first steps toward converting the $8 billion fund that subsidizes rural telephone service into one for helping pay to provide broadband Internet service to underserved areas, according to commission officials.
Julius Genachowski, chairman of the F.C.C., is expected to call for a consolidation of existing methods of supporting rural phone service into a new pool of funds.
The F.C.C. chairman, Julius Genachowski, is expected to outline the proposal in a speech on Monday, the officials said.

Most of the money under discussion involves a longstanding subsidy known as the Universal Service Fund, which is paid for through fees tacked onto most consumers’ phone bills and distributed among telephone companies to subsidize the high costs of providing service to rural areas.'

Gee, that sounds like a subsidy for rural areas.

Add it onto roads, water, power, airports, railstops, mail service etc.

Even the defense industry has become a rural sop.

Congress excels at lard. The federal government excels at lard.

And rural states have two senators each.

Ergo the lard pours into rural America.

 
At 4/01/2011 6:54 PM, Blogger Che is dead said...

"Benji",

What is it with you, do you never have an original thought? I think that everyone who reads this blog must have read your tired arguments a hundred times. Every one of your posts is some expression of small mindedness and bigotry, usually directed at farmers or the military and lacking any supporting evidence. Why do you feel so threatened? Have you talked to a professional about this problem?

 
At 4/01/2011 8:22 PM, Blogger Che is dead said...

"Benji",

Most of the states that you refer to as rural are western states. These states, through the advocacy of leftists in more urbanized areas, have had most of their land and natural resources put off limits by the federal government. If they were allowed to exploit those resources they would be the wealthiest places in the country on a per capita basis. So, please, convince your lefty friends to withdraw from the union and form a "people's paradise", I'm sure that those folks in the rural states would be happy to make a killing selling you, and the rest of the world, the resources that you are currently making it impossible for them to exploit. Oh, I know that you think of California as an urban state, but one of the largest parts of it's economy is agriculture so don't be surprised if the more rural areas of California sign up to join them.

 
At 4/01/2011 8:25 PM, Blogger juandos said...

Oh this is shocking!

Sen. Richard the R.I.N.O. Lugar is actually wanting to cut something like sugar supports?!?!

Did Sen. Mary Landrieu screw him out of something?

 
At 4/01/2011 10:46 PM, OpenID Sprewell said...

Benjie, it's actually worse than you know, particularly in telco. The phone and cable companies took billions in tax credits, promising that they would build super-fast internet lines in populated areas AND cover the rural areas. The money spent on the rural areas is nothing compared to how much they've soaked up through their oligopoly in the populated areas. Every time they're supposed to be held to account for this, they go crying back to the regulators, saying that they're now losing money and that they need to merge more to build scale. You need scale for a network?! And guess why they can keep scamming us all this way, because the govt has been given to the power to make these shitty deals with them for us. Who wants to give the govt more power to make more horrendous deals like this? The Democrats.

 
At 4/01/2011 10:52 PM, OpenID Sprewell said...

As for the rest of the subsidies you detail, I'm for ending all of them and I suspect most here are also, so I don't know why you keep bringing up that point, as though we're a bunch of Republicans. The fact is that both major parties are fucked up: the Republicans want to control who can marry or what you can do socially, while the Democrats want to take your money and shit it away. Well, the Democrats have largely won on their social issues, so the big issue now is to stop them from taking our money. Of course both parties steal our money, the Democrats just want more, a lot more. The hope is that by infusing the Tea Party into the Republican tent and making them more libertarian, we can finally stop the theft, but like I said in a different thread, when even the Republicans pushed by the Tea Party can barely muster $61 billion in cuts, I'm increasingly thinking the only solution is to just leave the country.

 
At 4/02/2011 11:20 AM, Blogger VangelV said...

Sugar. Ethanol. Wind power. Solar.

All corporate and social welfare schemes need to be ended once and for all. There is no need to make consumers and workers poorer just so that politicians can buy a few votes to keep them in power.

But that does not go far enough. All of those useless corrupt federal departments (Energy, Commerce, Agriculture, Housing, Education, etc.) need to be shut down and the value-added functions that they do, if any, need to be taken over by the states, counties, or better yet, the private markets.

 
At 4/02/2011 4:38 PM, Blogger Dr. T said...

@Benjamin: "Fine, then you have no problem with eliminating the USDA entirely, and wiping out all other rural subsidies as well, since they are not important."

Absolutely! I think you missed my point: The vast majority of farming gets no government subsidies or price supports, and that's the way is should be!

I'm a libertarian who would like to see almost all government departments and programs eliminated, including rural infrastructure support.

If someone wants to farm out in West Nowhereville, then he should pay the full costs of running power lines, phone lines, cable, etc. or he should buy a generator, get satellite internet and TV, and use ham radio or VoIP to talk with others.

 
At 4/03/2011 6:49 PM, Blogger Mayfield said...

We eat cane sugar in the South.

I have never seen a bag of sugar made from beets.

 
At 4/04/2011 9:59 PM, Blogger Ron H. said...

"I have never seen a bag of sugar made from beets."

I don't know for sure, but I've been told that many store brands of sugar are beet sugar. If the bag doesn't indicate "cane sugar", then it is probably made from beets.

Again, It's only what I've been told.

What I DO know, is that there is no difference in white granulated sugar made from cane or beets. You can't tell the difference. Let price be your guide.

If someone knows something different, I'd be happy to hear about it.

 
At 4/04/2011 10:06 PM, Blogger VangelV said...

I don't know for sure, but I've been told that many store brands of sugar are beet sugar. If the bag doesn't indicate "cane sugar", then it is probably made from beets.

You are right.

http://www.sugar.ca/english/canadiansugarindustry/sugarmarket.cfm

 
At 4/05/2011 1:25 AM, Blogger Ron H. said...

VangelV

Thanks for the link. for some reason I was having trouble finding info.

 

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