Saturday, June 16, 2012

Disgusting: Big Sugar subsidy lives on in Congress' Farm Bill ... by gimleteye

Earlier this week The Wall Street Journal editorial page weighed in against subsidies to rich farmers -- one of the worst forms of corporate welfare: they should be stopped. The Journal singled out the sugar program. An amendment offered by Senator John McCain yesterday in the US Senate to repeal the program that enriches sugar producers, failed.

It is no great secret that Florida politics revolves around the axis of Big Sugar, whose campaign contributions lubricate every elected official who has a chance to influence its bottom line profitability. You have to hand it to Big Sugar: their product poisons people, poisons the Everglades and poisons Democracy yet they enjoy power untouched even by law.

However, according to the Atlantic, "On Wednesday, big sugar beat back an attempt by Sen. Jeanne Shaheen, D-N.H., to eliminate a decades-old sugar price support program. The Senate voted 50 to 46 to table her amendment. Sugar interests such as American Crystal Sugar and Flo-Sun Inc. are among the biggest campaign contributors in the agribusiness sector, giving to Democrats and Republicans alike." 


Of course, it goes without saying that the Citizens United decision by the Bush Supreme Court has made it impossible to measure exactly how much money Big Sugar is throwing into the political process, to ensure that its poisoning ways continue indefinitely.

A constitutional referendum passed by Florida voters in 1996 held Big Sugar primarily responsible for cleaning up the pollution it causes in the Everglades. A recent economic analysis, funded by the Everglades Foundation, discloses that taxpayers are still, more than fifteen years later, picking up more than 2/3rds of the cost. Big Sugar is wringing the fading Everglades of the last drop of profit, and when the land is totally exhausted it will be used for whatever purpose they can convince local zoning boards to approve, or move operations offshore to the Dominican Republic (that the Fanjuls already dominate) or Cuba, where Alfie Fanjul was recently sighted.

Doing away with the sugar program could save American consumers $3.5 billion and create more than 20,000 jobs a year in the food industry, thanks to lower sugar costs. Someday.

Today, US Senator Marco Rubio does the bidding of Big Sugar and Big Ag -- attempting to knee-cap the EPA's ability to regulate nutrient pollution of Florida waters while an indifferent and incurious Gov. Rick Scott presides over a state environmental agency whose primary skill is to knee-cap its own regulatory authority on nutrient pollution. (The Fanjuls threw their support to Rubio after former Gov. Charlie Crist attempted to purchase more than 130,000 acres of lands owned by US Sugar. The Fanjuls and their lobbyists reject any deal involving sugar or the Everglades whose terms they don't dictate.)

This is not only "government-designed-to-fail" but it is also failure with no prescription for progress other than to trust the polluter feeding from the government trough. Why does the Tea Party allow Big Sugar and its candidate, Marco Rubio, get away with it?

Anyhow, this was the Wall Street Journal editorial from earlier this week, when there seemed a prayer that Big Sugar would finally see an end of its free lunch ...

"One reason industry handouts flourish in Washington is that they provide concentrated benefits to a few producers, while the cost is spread widely to all Americans. A case study is the sugar program, which the Senate will vote on as early as today...


For the first time in memory, there is a real chance of reining in this agribusiness welfare, which imposes a complicated system of domestic price supports coupled with domestic and import quotas that restrict the supply of lower-priced sugar.

The program provides about $1.4 billion each year to fewer than 5,000 large and mostly prosperous beet and sugar cane producers. But according to a 2011 American Enterprise Institute study by North Carolina State economist Michael Wohlgenant, it costs consumers about twice that amount, mostly in higher food prices. It's a conveniently hidden tax and a regressive one too. When Big Sugar says the program imposes "no net cost" on the budget, they're not talking about the family budget. Americans pay about 50% more than the world price of sugar.

This giveaway survives because sugar cane producers in Florida, Louisiana, Texas, and Hawaii have formed an alliance with sugar beet producers in about a dozen states, from Michigan and Minnesota through North Dakota and Wyoming in the Great Plains. Corn producers also like the import restrictions because the higher the price of sugar, the more demand for cheaper corn-based sweeteners. That's a lot of Senators.

As with every trade barrier—for steel, cars, planes, microchips—sugar quota defenders make a flag-waving appeal to save domestic jobs by keeping out low-priced, and in some cases subsidized, imports from places like the Caribbean islands and Central America. Except that sugar quotas that are designed to keep prices artificially high cause a net loss of jobs.

A Commerce Department study in 2006 found that for every agriculture job that is saved by the program, the U.S. loses as many as three jobs, mostly in the food industry, which has higher costs due to the sugar quota. A 2011 Iowa State study found that eliminating price supports and quotas would create 20,000 jobs for food processors, bakeries and candy makers.

The Senate amendment to reform this program is sponsored by Republicans Richard Lugar of Indiana and Pat Toomey of Pennsylvania and Democrats Jeanne Shaheen of New Hampshire and Richard Durbin of Illinois. They have the support of dozens of groups on the left and right, from Americans for Tax Reform to the National Wildlife Federation.

This is bipartisan cooperation that the good-government media types ought to be celebrating. Reforming Washington's corporate welfare culture will require victories on votes like this. Senators who protect the sugar program are voting for the 0.001%.

A version of this article appeared June 13, 2012, on page A14 in the U.S. edition of The Wall Street Journal, with the headline: A Sugar Showdown."

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