IN a hall of fame for corporate-welfare queens, the sugar industry would occupy a place of special honor. For decades, powerful sugar growers have gotten politicians to enrich them with a protectionist scheme that inflates domestic sugar prices to the detriment of American consumers, American manufacturers, American farmers, and the American economy as a whole. In that congeries of absurdities known as U.S. farm policy, sugar’s sweet deal stands out as perhaps the most damaging and least defensible program. Now, more than ever, it needs to be scrapped.
The program allows sugar processors to take out loans from the USDA by pledging sugar as collateral. The loan rates-18 cents per pound for cane sugar, 22.9 cents per pound for beet sugar-are significantly higher than average world sugar prices. These loans must be repaid within nine months, but processors also have the option of forfeiting their sugar to the government in lieu of repaying their debt.
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