WASHINGTON--(BUSINESS WIRE)--Today, Tom Schatz, President of the Council for Citizens Against Government Waste (CCAGW), issued a letter to United States Senators urging them to vote for Sen. Richard Lugar’s (R-Ind.) Free Sugar Act of 2011. Sen. Lugar’s bill would remove the complex arrangement of price supports, import quotas, tariffs, loans, and marketing allotments that currently distort the American sugar market. The letter reads in part:
“It is time to dissolve the U.S. sugar program, an imprudent system which has survived since the New Deal era. Its antiquated, Soviet-style command-and-control structure has proven to be detrimental to American consumers and businesses, as it creates artificially high sugar prices that greatly affect the cost of food and beverages. On the world market, refined sugar is sold at $0.34 per pound. However, Americans pay twenty cents more than the average world consumer due to a combination of market allotments, which assure domestic producers at least 85 percent of the market; strict import quotas and tariffs, which prohibit buyers from taking advantage of lower priced sugar available internationally; and a twisted system of price supports, which grants ‘loans’ (i.e. taxpayer dollars) to processors when prices fall below the official level to ensure that 'Big Sugar' gets a sweet deal. If processors are unable to sell their sugar on the open market at a price higher than the loan rate, they can repay this loan in the form of sugar.”
CCAGW has long been opposed to the federal government’s regressive transfer of billions of dollars from taxpayers to “Big Sugar,” which has often claimed that its favors come at no cost to taxpayers. While sugar companies do not receive direct payments the way, for example, corn growers do, a subsidy by any other name is still a subsidy. Big Sugar gets its licks in against taxpayers by using government power to inflate prices and shake down consumers. As Mark Perry, American Enterprise Institute scholar and economist at the University of Michigan-Flint School of Management, explained in January, 2011, “American consumers and sugar-using businesses paid an additional 25.4 cents per pound last year over the world price for each of the 17.5 billion pounds of domestically produced sugar [they consumed], which totals to almost $4.5 billion in higher sugar costs in 2010.” According to Dr. Perry, U.S. sugar prices have averaged more than double the world price since 1982.
The U.S. sugar program demonstrates that when it comes to federal government policies and programs, good intentions are irrelevant. The passage of Sen. Lugar’s bill would constitute an enormous victory for consumers, taxpayers and the overall U.S. economy.
The Council for Citizens Against Government Waste (CCAGW) is the lobbying arm of Citizens Against Government Waste, the nation’s largest nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government.