Ever notice how some government programs draw the ire of almost everyone? Conservatives, liberals, environmentalists, libertarians, business, labor, consumers and grouchy taxpayers are all opposed. Yet these programs go on as though directed by an unstoppable particle beam from a neighboring galaxy.
The public rarely sees who in Washington keeps the outrage in motion, and that’s how “they” get away with it. The sugar support program is one such curiosity. We will get into the “who” and “how,” but first an explanation of why almost everyone hates it. Americans pay about three times the world price of sugar because of a complex farm program designed to greatly enrich U.S. sugar growers and processors, in actuality a handful of families. Among other things, it limits imports of far cheaper sugar from impoverished Caribbean countries. It provides taxpayer-backed loans: If prices slip, the borrowers repay their loans with sugar, which taxpayers must sell at a loss or store at their own expense. In sum, the policy provides a government-guaranteed income to cane sugar producers in Florida and sugar beet growers in Minnesota and Michigan.
Who pays? American consumers, for starters. The manipulated price of sugar amounts to a tax estimated at $3 billion a year. The domestic sugar industry argues that 142,000 jobs would be lost if the sugar program ended. But the Commerce Department reported in 2006 that inflated sugar prices kill three manufacturing jobs for every sugar-growing and -processing job saved.
Many U.S. candymakers have seen no choice but to move factories and their jobs to countries with normal sugar prices. Among the examples: Atkinson Candy Co., of Lufkin, Texas, recently sent most of its peppermint candy production to Guatemala. “It’s a damn shame,” company President Eric Atkinson told The Wall Street Journal. He had to move 60 jobs to Central America that should have stayed here.
