Frequently Asked Questions
Below you’ll find some of the most frequently asked questions about the U.S. sugar program, and why American food manufacturers are advocating for reform. Please let us know if you have additional questions.
What is the U.S. sugar program?
The U.S. sugar program is a complicated tangle of price supports, market allotments, import quotas, and government-guaranteed loans – that has been protected by special interest since the Great Depression.
The sugar program artificially inflates the price of sugar in a couple ways:
- Limits on sugar imports help shield domestic producers from competition.
- The government guarantees U.S. sugar producers a minimum price for their sugar if the market price falls below that level.
How does the sugar program impact food and beverage companies?
The sugar program hurts small, family-owned businesses that are the backbone of our economy and drivers of growth. It forces manufacturers to pay twice as much for sugar as the rest of the world, putting American businesses at a competitive disadvantage when it comes to creating jobs.
Food manufacturing is one of the largest manufacturing sectors in the country. Companies that use sugar as an ingredient in their products include important segments of the American economy – from frozen food, and fruit and vegetable canning to pasta sauce, cereal, confectionery, bread and bakery production.
Why should Congress reform the U.S. sugar program?
The United States is home to some of the highest sugar prices of any major market in the world, because of Depression-era policies preserved by large political donations by sugar producers. The sugar program forces food and beverage manufacturers to pay twice as much for sugar as the rest of the world, putting American businesses at a competitive disadvantage when it comes to creating jobs.
U.S. prices for sugar are artificially inflated as a result of special protections put in place by the federal government, including limits on domestic production and imports, industry loans, and forced purchases.
Propping up the sugar-producing industry at the expense of taxpayers, consumers and businesses is the worst form of crony capitalism. It is analogous to price fixing tied to decades of political donations, benefiting a few billionaires and Washington insiders.
Is it true the current sugar program operates as a “no net cost” program?
No. The U.S. sugar program is a multi-billion dollar annual transfer from American consumers and businesses to U.S. sugar producers and Mexican sugar mills and growers. The sugar program is a hidden tax that costs Americans $2.4-$4 billion a year. Since 2000, Americans have paid almost $50 billion in government mandated prices to benefit one politically connected interest group.
What is the impact of the U.S. sugar program on American jobs?
The sugar program has killed about 123,000 jobs between 1997 and 2015, according to the U.S. Census Bureau. The U.S. Department of Commerce estimates that for every sugar-growing job saved through high U.S. sugar prices, approximately three American manufacturing jobs are lost.
How does the U.S. sugar program distort markets?
The U.S. government controls domestic production by giving each sugar processor an “allotment” — it is illegal for the processor to sell more than this government dictated amount of sugar, regardless of supply and demand conditions. Essentially, the government is micromanaging the market by telling individual companies how much of their product they can make and at what cost they can sell it.
If the sugar program were eliminated, would it force small farmers and sugar growers out of business?
No. The companies that use sugar as an ingredient in their products rely on sugar producers for the domestic supply of sugar. What we in the coalition are advocating for is reform to the sugar program that is based on free market principles to provide us with an adequate supply at a reasonable price.