By John Downs
Maintaining the status quo on America’s sugar policy is unsustainable and unacceptable. Congress should take any opportunity this year to reform the costly sugar subsidy program, because propping up the sugar-producing industry at the expense of taxpayers, consumers and businesses is the kind of crony capitalism the American people have grown tired of seeing—and frankly, that Washington must aggressively confront.
Because of Depression-era policies preserved by large political donations by sugar producers, the United States is home to some of the highest sugar prices of any major market in the world. Currently, prices of refined sugar in the United States are 58 percent higher than those in the European Union. There are many factors affecting domestic and global sugar prices, but one thing is for sure, if Congress continues to rubber-stamp the flawed sugar subsidy program in farm bill after farm bill, high sugar prices and taxpayer bailouts will continue to dog economic growth in the United States and threaten American jobs.
With U.S. sugar prices now double the rest of the world, it is reasonable to wonder who actually benefits from these high domestic prices. It is sugar beet and sugar cane producers in a few states that recklessly wield their political influence to the detriment of the American taxpayers.
The sugar producer lobby often says the program “operates at no cost,” but nothing could be further from the truth. In fact, a March 2015 Congressional Budget Office estimate of farm program costs forecasts that the sugar program will cost taxpayers $115 million over the next 10 years. That is in addition to the nearly $3.5 billion that consumers and businesses pay each year, because of these dated policies. This is a multibillion-dollar annual transfer from American consumers and businesses to U.S. sugar producers and Mexican sugar mills and growers.
These costs are troubling, but even more so now given recent managed trade agreements, which move America’s protectionist sugar policies even further from a free market-oriented approach.
Nearly 127,000 jobs were lost between 1997 and 2011. The U.S. Department of Commerce also estimates that for every sugar-growing job saved through high U.S. sugar prices, approximately three American manufacturing jobs are lost. These policies have contributed to the loss of nearly 10,000 jobs per year in the U.S. food and beverage industry.
For years, Congress has missed opportunities to reform the sugar subsidy program, including the most recent farm bill. Despite numerous hearings and a protracted public debate on various aspects of our nation’s farm policy, the sugar program was the only commodity program that went untouched by federal lawmakers.
Yet this year there is an opportunity to seize the mantle of leadership on this issue, not just for our nation’s elected leaders, but also the presidential candidates. This is a very real moment for these thought leaders to set themselves apart from the rest of the field by committing to change.
America cannot afford for Congress to wait until the next farm bill debate to enact sugar reform. The time to act is now.
Downs is president of the National Confectioners Association and chairman of the Coalition for Sugar Reform.
Source: www.thehill.com