Posted on 07/16/2007 8:52:38 AM PDT by Toddsterpatriot
“It’s an outrage!” That’s the usual cry of Washington politicians when they chastise the world outside their chambers for their profligate ways, which they then promise to “fix” by passing more laws. Now is the time for consumers and taxpayers to shout back at their legislators — and they should focus on proposals for the new 2007 farm bill, especially the bloated sugar program.
The House Agriculture Committee is scheduled to debate the new farm bill starting on July 17, with the full House expected to consider farm legislation later this month. Agriculture Committee Chairman Collin C. Peterson (D., Minn.) is proposing to include a new sugar system to further sweeten the pot for the large agribusinesses that already benefit from one of the most outrageous government programs on the books.
The current U.S. sugar program is a complex system composed of three main parts — all designed to reward sugar producers at the expense of consumers and taxpayers. The program restricts the domestic supply of sugar, guarantees sugar producers a minimum price, and keeps out many imports. The cost of this price support and tariff regime includes higher food prices for U.S. consumers, lost jobs in sugar-using industries, a waste of taxpayer dollars, environmental damage to ecologically sensitive areas, and the loss of economic opportunities for many small farmers in poor countries.
Under the current program, Americans have been paying for sugar at two to three times the world price over the past 25 years. The Government Accountability Office (GAO) estimates that the program has cost consumers $1.8 billion per year. A later OECD report corroborated this huge consumer cost but put the figure slightly lower, at about $1.4 billion.
But that doesn’t seem to be enough to satisfy the small-in-number but huge-in-influence sugar producers. They want higher price supports and better guarantees that more foreign sugar will not be allowed into this country. In the new proposals, the sugar price support would be increased from 18 cents to 18.5 cents per pound for raw cane sugar, and from 22.9 cents to 23.5 cents per pound for refined beet sugar. A study by the consultancy Promar International estimates that this increase would cost American consumers an additional $200 million per year.
Because of the high cost of sugar, jobs are lost in industries that use sugar in large quantities. Last year a Commerce Department study found that restricting sugar imports led to a loss of 10,000 jobs in candy manufacturing and noted that for every one job saved in the sugar industry, three jobs were lost in the confectionery industry.
The higher price supports in the proposed legislation, in addition to leading to higher costs for consumers and taxpayers, would also encourage even more domestic sugar production, which will mean further encroachments by sugar producers into ecologically sensitive areas, such as Florida’s Everglades.
The current program constrains sugar imports under a tariff rate quota (TRQ) system that allows specific amounts of sugar from certain countries to be imported duty-free, with high tariffs applied to sugar above those quotas. However, the proposed legislation could further restrict sugar imports by mandating how much sugar can be imported during specified periods. That mandate would take away the USDA’s discretion to allow TRQ imports as they are needed and further disrupt the supply.
The proposals also add a new component to the sugar program: the use of surplus sugar to produce ethanol, even when government reports show that U.S. sugar is a costly ethanol feedstock. This mandate — besides costing taxpayers — would also cause producers to shift from food to fuel use of sugar, which would further harm consumers by restricting the supply of food sugar and artificially boosting demand for sugar overall, leading to even higher prices.
And who benefits from this largesse? A small number of large sugar-cane and sugar-beet producers. A GAO study in the early 1990s showed that only one percent of sugar cane and sugar beet farms received 42 percent of the program’s benefits. The benefits are especially concentrated for sugar-beet producers: Just four firms accounted for 87 percent of production in 1990.
Fortunately, in both the House and the Senate, some legislators do recognize that the needs of consumers and taxpayers should trump the appetites of rich sugar producers. In May 2007, Senator Richard Lugar introduced a bill — called FARM-21 — that would, among other provisions, end the sugar-loan program and lift barriers to sugar imports. A similar version of the bill was introduced in the House by a bipartisan group of U.S. congressmen: Representatives Ron Kind, Jeff Flake, Joseph Crowley, and Dave Riechert.
The U.S. sugar program is one of the most egregiously harmful government programs to consumers and taxpayers. With consumers today facing higher prices for food and taxpayers facing a huge budget deficit, policymakers should take strong steps to repeal the U.S. sugar program instead of handing out more candy to Big Sugar.
— Frances Smith is an adjunct fellow, trade and consumers, at the Competitive Enterprise Institute, and is the former executive director, Consumer Alert.
Really? Then explain this for me. '08 HUMMER H1 Alpha Open Top MSRP $135,125, 2008 Lexus ES 330 MSRP: $32,300, 2008 Lexus GS MSRP:54,900, 2008 Chevrolet Aveo5 MSRP: $11,980. There are jobs that produce the Hummer and Lexus and there are jobs that produce the Chevrolet at wildly differing prices. Why is it that higher prices = loss of jobs only in the sugar industry?
The reason why high fructose corn syrup has replaced sugar in many products is the high domestic cost of sugar caused by these subsidies and price supports for US sugar beet farmers. However, now with government subsidized corn based ethanol, corn prices and thus HFCS are on the rise. Either way the US consumer pays through the nose. Perhaps one day sugar will again be back in our Coke if we can afford to buy one.
HFCS is a substitute for sucrose. Where there was once (or would be) sucrose there is now HFCS. If the market was willing to pay more for sugar, manufacturers would use it and charger higher prices. That's not happening.
As a matter of fact HFCS has replaces sugar nearly one-for-one, in per-capita consumption, since 1970.
As for poison.....you must also believe that sucrose is poison since both sucrose and HFCS are made up of the same two ingredients, in almost identical proportions, that are metabolized by the same pathways in the body. Your body can't tell the difference between glucose and fructose from sucrose or glucose and fructose from HFCS; nor does it care. It all gets converted into glucose by the body anyway. Eat more of either of them than you burn and you're going to get fat.
the studies on it are alarming
The only thing alarming here is the lack of understanding of basic chemistry and nutrition by those who try and perpetuate this fraud. Lew Rockwell? Good grief!
High Fructose Corn Syrup has an almost ‘forever’ shelf life = that’s the bottom line.
Huh? Sugar doesn't have a long shelf life?
But, even those HFCS is less expensive for the manufactures, when did ever notice that savings was passed on to us?
If manufacturers immediately began using sugar instead of HFCS what do you think would happen to prices? Or, do you think the manufacturers would just absorb the higher costs and offer their shareholders a lower return?
Here’s a couple links - but do your own research
Those links and the word research shouldn't be used together in the same sentence.
(If you drew a chart showing the climb of the use of HFCS in the past 2-3 decades and a chart of the increase in obesity, diabetes etc = they would be pretty identical..
Sure. Correlation always proves causation, right? Obesity has nothing to do with using sugar or HFCS. It has everything to do with consuming more calories than you burn. Unfortunately, there's a lot of grant money at stake for proving that obesity is caused by something nefarious being forced on us by evil corporate America instead of something simple and basic like eating less and exercising more.
“That net worth is based primarily on their land.”
And their residence, vehicles, farm equipment and crops & livestock (which could die overnight). When you take into account that small farmers networth is averaged with billion dollar agribusinesses, that number is almost laughable.
Misguided & disingenuous people said the same thing years ago about the timber industry. They said: “Nothing but wealthy loggers living on government subsidies! And see how they are destroying the environment!” World trade, imports are good, cheaper consumer prices blah blah, blah. Look around and see what these people have accomplished: The US lumber industry has been devastated. Forests are neglected and a serious fire hazard. Environmentalists have claimed the forests, taking away their productive value and requiring billions of dollars in environmental management funds. Everyone’s taxes are substantially higher. Home prices have skyrocketed, due in large part to the higher imported lumber costs. My last 2x4 came from the Czech Republic. It has become cheaper to ship them around the world than to produce them here.
I think that while far from perfect, we should not turn over our agriculture industry to shortsighted people. Instead of bartering it away to China, we should support it and make sure that it remains competitive. Trade practices should be fair and prevent our being exploited.
That is, unless everyone likes crippling grocery prices, eating food treated with ethylene glycol and sitting around complaining about another offshored industry.
“It nothing more than corporate welfare. We should eliminate all farm subsidies.”
Perhaps we should adopt the Soviet or Zimbabwe model. Will that make you happy?
You're right, of course. Isn't it interesting how some socialist policies are portrayed as "American as apple pie"?
Actually, I think the family farmer and all of us would be better off without government subsidies and price supports. Right now the main beneficiaries of price supports and related farm welfare are the conglomerates like ADM, Tyson, Cargill, Perdue and such.
If the gov’t didn’t give away such corporate welfare, the conglomerates would have a much tougher competitive environment.
If you want illustration, look at all the flourishing specialized plant nurseries, CSAs and organic farms around that have found very lucrative niches. If we got the gov’t out of the rest of farming, the same thing would happen for all family farmers.
Kleptocracy placemarker.
When you take into consideration that the average American's net worth is averaged in with guys like Warren Buffet, Bill Gates and so many others, you have to wonder why the average farmer's net worth of $838,875 is more than 8 times the national average. The farm industry sports an 11.4 percent debt-to-asset ratio, which is the lowest ever measured. Farms, despite all the protestations to the contrary, fail at only one-sixth the rate of non-farm businesses.
Looks like farm incomes, across the board, are higher than the national average for all Americans. Farm subsidies, designed originally for family farmers, now go to the commercial farmers who account for the top 10% of all producers. These farmers have an average income of $200,000 and an average net worth of about $2 million.
According to the Heritage Foundation: If farm subsidies were really about alleviating farmer poverty, lawmakers could guarantee every full-time farmer an income of 185 percent of the federal level ($38,203 for a family of four) for just over $4 billion annually—one-sixth of the current cost of farm subsidies.
Farm subsidies are being given to the people who don't need them and should be ended immediately. How can you defend this kind of welfare?
Instead of bartering it away to China, we should support it and make sure that it remains competitive. Trade practices should be fair and prevent our being exploited.
Federal protection of an industry makes it more competitive? Sorry, that's not what experience has taught us. Protecting industries from competition does nothing to make them more competitive but it does make them richer at the expense of all consumers. China's food exports to the U.S. account for only about 3% of all the food we import. Consumers should be concerned about food imports from China, not farmers.
That is, unless everyone likes crippling grocery prices
Less competition results in lower prices? How exactly does that work? Does our domestic sugar industry provide a good example for you?
I remember reading somewhere that there is a Department of Agriculture (Government employee) for every farmer in the USA. What is right about that?
George, the USDA also administers all the nutrition programs for the schools, so it’s not just farmers that the agency is working with.
Your original statement was that (corn) farmers were making a killing due to the ethanol surge. I answered your misconception.
"Then the farmers wouldn't mind if we ended these welfare programs."
Most farmers that I know personally would not mind a bit. Getting regulators and speculators out of the farming business would be the best thing to happen to farmers since they started building green tractors in Moline. Do you really think that the farmer is setting the price of corn or beans or cotton? Study-up if you do
Wasn't me.
Most farmers that I know personally would not mind a bit.
Excellent!
Do you really think that the farmer is setting the price of corn or beans or cotton?
Why would I think that?
Bingo
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.