Column By: Peter R. Crabb, Professor of Finance & Economics,Northwest Nazarene University in Nampa
Summer is near, and soon we will all be thirsting for cold drinks to beat the heat. If you want to add a little more sugar to your iced tea, lemonade or other summer favorite, call the government: It looks as if there will be plenty of sugar to pass around.
As reported by The Wall Street Journal last month, the U.S. Department of Agriculture plans to buy 400,000 tons of sugar from domestic producers this year, including Idaho’s own Amalgamated Sugar Co. The USDA action is part of federal price supports and subsidies for the industry that date back to the early 1930s.
A big part of the USDA price-support program is a quota system limiting how much can be imported from other sugar-producing countries. …
The sugar support program may protect U.S. production, but not without a high cost. A 2011 study by researchers at Iowa State University estimates a $2.9 billion to $3.5 billion annual cost to consumers from the program.
The American Sugar Association claims the U.S. sugar industry supports jobs for 142,000 workers. Therefore, the cost to consumers looks to be around an extra $20,000 or more per job.
So enjoy summer and all the sweet drinks. We’re paying dearly for them.
Read the full column here.