America’s longest-standing case of ‘legal plunder’ and ‘crony capitalism’ – the sugar racket

peggy lee cc

As we have said before, the only thing sweeter than sugar are sugar subsidies.

(From AEI)

Due to trade protectionism for relatively inefficient domestic sugar producers, American consumers and domestic sugar-using industries have been forced to pay twice the world price of sugar for many generations. The chart above shows that the average wholesale price of domestically-produced sugar in the US (29.23 cents per pound) is more than twice the average world price of sugar (14.87 cents per pound) since 1982, according to USDA data available here. For the latest month available (August), the US sugar price of 33.13 cents per pound was more than double the world price of 15.57 cents. Most of the time, the cost to consumers of trade protectionism (aka crony capitalism) is hidden and difficult to calculate. But with sugar protection, we get a monthly estimate of exactly how much money per pound domestic sugar producers are being allowed to legally pick from the pockets of millions of American consumers and thousands of sugar using-companies. Annually, the federal sugar program that subsidizes and protects Big Sugar from competition through import restrictions, price supports and loan guarantees, artificially raises US sugar prices to twice the world price and costs American consumers somewhere between $1.9 billion (according to a GAO estimate in 2000) and $3 billion (my more recent estimate for 2012 here).

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