July 3, 2015

DON'T PICK WINNERS; MAKE LOSERS:

Big Corn vs. Big Sugar could have a sweet outcome for taxpayers (Charles Lane, July 1, 2015, Washington Post)

 The Corn Refiners Association, headed by giant grain processors such as Cargill and Archer Daniels Midland, is taking aim at the federal sugar subsidy program -- which shares both Ex-Im's birth year, 1934, and its propensity for wasting resources and distorting markets.

Perhaps you did not know that it is unambiguously in the public interest for the United States' sugar farmers and refiners to make a profit, even though many other countries produce this fungible, but dietarily dubious, commodity at a lower cost.

Well, Congress, well-lubricated by the sugar lobby, believes that it is, and hasn't really revisited that conclusion for decades. And so we have country-by-country quotas on imports, buttressed by domestic price supports.

The net effect is to soak U.S. consumers every time they buy sugar-containing products, from soda to Snickers bars. The industry used to boast that its government protection does not cost taxpayers anything directly, but that claim has been exploded due to recent market developments that forced the federal government to, in effect, buy up tons and tons of sugar and sell it to ethanol refiners at a loss -- so as to prop up prices. Taxpayers took a hit of some $258 million in fiscal 2014.

So now the Corn Refiners Association is throwing its high-powered lobbying operation behind a bill that would, for the first time, cap taxpayer exposure to sugar-market ups and downs, with votes on the floor of the House looming later this summer.

There's actually a chance that sugar program reform, a cause heretofore supported by the candy and cake makers, plus a few hardy environmentalists, will finally have enough muscle to prevail.

Perhaps the best sign that the Corn Refiners' position has already made an impact is that Big Sugar's backers are resorting to the same old specious arguments that rent-seekers, and their friends in Congress, always trot out. The sugar program, which subsidizes cane growers in the Florida Everglades and sugar-beet growers in Minnesota, is "critical to jobs and economic development," Sen. Al Franken (D-Minn.) told the Minneapolis Star-Tribune.

Tell that to the candy-factory work force, which shrank from 70,500 to just under 55,000 between 1998 and 2011, due in large part to the high cost of sugar inputs, according to the Wall Street Journal.

Posted by at July 3, 2015 10:24 AM
  

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