SUBSIDIES WON'T WORK FOR SUGAR FARMERS

By: Jessie Breaux
Publication: American Sugar Alliance
Released: February 2007


Farmers are walking the halls of Congress to plead with lawmakers NOT to give them huge government subsidy checks.

It seems as unlikely as billionaires begging to close those pesky tax loopholes or environmentalists gushing for oil drilling.

But that’s the crux of the farm bill debate unfolding over America’s sugar policy.

Large food manufacturers are lobbying for a new sugar program that would send sugar producers an estimated $1.3 billion a year in subsidy checks.

Sugar farmers have told Uncle Sam to keep the money. They want to rely on the market, not on taxpayer checks, to make their living.

The real irony is that these multinational food conglomerates are asking Congress to ignore budget deficits and put a big price tag on a sugar program that, to date, hasn’t cost taxpayers anything. You read that right: Zero dollars.

For this investment of nothing, American grocery shoppers and candy makers have enjoyed sugar prices that are far cheaper than in other developed countries.

Did you know that you spend more on 10 gallons of gasoline than you do on a year’s worth of sugar? And sugar is an ingredient used in nearly everything we eat.

To trash this success story for an unproven subsidy plan makes no sense, but to understand the food companies’ rationale, you just have to do a little digging.

These are publicly-traded companies with dividend-hungry shareholders to answer to. They’d navigate even the most turbulent political waters in search of an extra penny of profit.

These companies need America’s efficient sugar farmers. They need the plentiful homegrown sugar supply, and they’ve come to rely on the superior quality of American sugar. But, they want to pay artificially low prices that would bankrupt the sugar industry.

Enter the U.S. taxpayer and a half-baked subsidy scheme.

Government subsidies, food manufacturers rationalize, could shelter farmers from a sugar price freefall.

But don’t think those rock-bottom sugar prices will translate to cheaper chocolate bars in the checkout line. History has shown that food processors and grocery chains pocket the windfall of plummeting ingredient prices instead of sharing the spoils with shoppers.

It’s obvious that the sugar subsidy is for rich food companies, not hard-working farmers.

Under the subsidy proposal, farmers would be left with an unproven—and likely unworkable—plan, grocery shoppers would see no benefit, and taxpayers would be left holding a $1.3 billion tab.

$1.3 billion a year might not sound like a lot to a rich food company executive, but everyday folks know better. $1.3 billion is enough cash to pay the salaries of 28,000 public school teachers for a year.

No wonder sugar farmers are on Capitol Hill fighting this sour subsidy scheme.

About the Author: Jessie Breaux is a sugar farmer from Franklin, Louisiana. He is also the president of the American Sugar Cane League.