February 19, 2012


Bitter Sweet: How Big Sugar Robs You (Michael Wohlgenant and Vincent H. Smith, February 14, 2012, The American)

For decades, sugar beet and sugar cane farmers and processors have been the beneficiaries of a sugar program that stealthily drives up sugar costs--and, consequently, the cost of that heart-shaped box of chocolates. Over the past 30 years, the annual burden on U.S. consumers has averaged over $3 billion in higher food prices.

The "no-romance" sugar program has largely been ignored by legislators and groups concerned with tax burdens because there are no direct federal subsidies for the sugar industry. Instead, U.S. sugar policy raises prices indirectly by taxing consumers through the marketplace. A system of import quotas and domestic supply controls works to raise sugar prices for households and food processors to a target level of 23.3 cents per pound of raw sugar when world prices fall below that amount. This system drives up consumer food prices and destroys jobs in the food processing sector because of reduced competitiveness in the global marketplace.

Over the 30-year period from 1980 through 2009, the sugar program effectively doubled the price U.S. consumers paid for sugar and increased annual food costs by about $9 per person. That may not sound like a big price tag, but it resulted in a $1.3 billion deadweight loss for the U.S. economy (think of all the extra money that could've been spent on red roses and high-end confectionary!). And how did the sugar farmers, who are fewer than 20,000 in number and relatively wealthy, fare? They received a $1.7 billion net gain.

How Big Sugar gets its way (Virginia Chamlee, 09.19.11, Florida Independent)

As one of Florida's top agricultural commodities, sugar has a lot to lose from regulations and a lot to gain from agricultural legislation. So the top companies spread campaign donations fairly evenly between Republicans and Democrats across the country, and are often rewarded with support.

During the 2010 cycle, U.S. Sugar donated $12,400 to then-Rep. Allen Boyd, while PACs and individuals working with Flo-Sun gave $16,000 and American Crystal Sugar gave $10,000. Sugar companies have also given heavily to Reps. Dennis Ross, R-Lakeland, and Tom Rooney, R-Stuart. Ross' second-largest contributor has been Flo-Sun; individuals working for the company donated at least $13,000 to his campaigns since 2009.

It is no surprise, then, that Boyd (before losing his 2010 reelection bid), Ross and Rooney have all crusaded against environmental regulations. The three have been especially vocal about the EPA's "numeric nutrient criteria," which could potentially affect agricultural interests including sugar, whose nutrient-laden effluent often makes its way into state waterways, causing noxious algal blooms and fish kills.

According to OpenSecrets, Big Sugar gave more than $4.2 million to federal candidates and party committees during the 2008 election cycle alone, 63 percent of which went to Democrats.

Companies with ties to Florida Crystals (which has contributed nearly $4.5 million to campaigns since 1991) gave at least $100,000 to now-Gov. Rick Scott's gubernatorial campaign. The head of Florida Crystals also hosted a large campaign fundraiser for Scott only four weeks after he blasted the company's rival -- U.S. Sugar -- over its role in a planned Everglades restoration project.

Adam Putnam, meanwhile, was one of the group's largest recipients in 2002, when he was running for reelection as a congressman. Big Sugar donated at least $61,000 to Putnam's successful 2010 campaign to become the Florida agriculture commissioner. Shortly after taking office, Putnam sought to delay a ban on sugary drinks in Florida public schools.

"We have been blessed in that the support for farm policies and sugar policies has not been a partisan issue."
The lobbying arm of U.S. Sugar is enormously powerful. In 2009, crop producers spent more than $20.5 million on federal lobbying. 

Posted by at February 19, 2012 3:54 PM

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