Subsidies for sugar producers raise prices for consumers and cost taxpayers billions of dollars per year, but now a bipartisan effort is underway in the Senate to repeal them.
The New Orleans Times-Picayune reported on Tuesday that, “seventeen U.S. senators have introduced legislation to repeal the U.S. sugar price support system, renewing a fight that was won previously by sugar producers.”
Although some believe that Republican majorities in Congress might be more receptive to repealing the subsidies, the Times-Picayune predicts that, “the sugar industry is still likely to prevail.” (RELATED: Sugar Lobby Sweetens Deal for House Republicans Protecting Subsidy)
Nonetheless, Democratic Sen. Jeanne Shaheen, along with Republican Sens. Mark Kirk and Pat Toomey, reintroduced the Sugar Reform Act last week, quickly attracting an additional nine Republican and five Democratic co-sponsors.
In a press release, Shaheen claimed that, “The [sugar subsidy] program has already cost consumers more than $14 billion since 2008 and meanwhile, 125,000 jobs in sugar-using industries have been lost since 1997.”
“Taxpayers shouldn’t be footing the bill for a sweet deal for a small group of sugar producers and processors,” she said. “This is a perfect example of an outdated government program that’s hurting consumers, putting taxpayer dollars at risk, and costing jobs.” (RELATED: Sugar Program Isn’t Sweet for Consumers or the Economy)
As recently as 2013, the press release states, sugar subsidies “led to a nearly $300 million bailout of the sugar industry … when the federal government was forced to buy hundreds of thousands of tons of sugar to protect sugar processors from default.”
The effort is especially relevant to Kirk and Toomey, both of whom represent states with major candy producers. Toomey is from Pennsylvania, home to Hershey chocolate, while Kirk is from Illinois, which he occasionally refers to as the “Candy Capitol of the world.”
“This flawed policy is corporate welfare at its worst and hurts not only candy companies and food manufacturers, but also the families who end up paying higher costs for food made with sugar,” Toomey said in the press release.
“Sugar producers are wasting no time mounting a defense,” though, the Times-Picayune claims.
The American Sugar Alliance, for instance, claimed in a recent press release that, contrary to the senators’ assertions, “U.S. sugar policy is expected to cost taxpayers $0 from FY 2015 to FY 2025.”
They do acknowledge the 2013 bailout, but describe it as “emergency action to prevent the market from collapsing after Mexico dumped a record amount of subsidized sugar onto the U.S. market.” (RELATED: A Good Deal on Sugar)
Under normal conditions, they explain, “farmers repay loans with interest instead of receiving subsidy checks,” allowing the program to operate at no cost to taxpayers, as they claim it did from 2003 to 2012.
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