AEI Critical of Wasteful U.S. Sugar Program

In its recent paper, American Boondoggle: Fixing the 2012 Farm Bill, The American Enterprise Institute cites an abundance of waste in the 2012 Farm Bill.  In its discussion of the sugar program, AEI states:

It does raise U.S. sugar prices well above world prices in most years, typically increasing domestic prices paid for sugar by almost 100 percent.

In a typical year, the sugar program increases sugar expenditures by domestic consumers by about $2.4 billion and generates about $1.4 billion in extra income for sugar producers…

In most years… the sugar program benefits the relatively wealthy few at the expense of almost all consumers.

As the figures quoted above indicate, the sugar program is an expensive way to transfer income – wasting $1 billion to transfer $1.4 billion. That is, the program costs about $0.66 for every $1 received by cane or beet farmers, or sugar processors.

Given that current world sugar prices are well above the price-support level and the industry is especially healthy, this would be an ideal time to end the program.

Read the full text here.

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