Free Minds & Free Markets

Sugar Subsidies Are Welfare for the Rich

America's biggest welfare recipients are often politically connected corporations.

When I hear "welfare payments," I think "poor people."

But America's biggest welfare recipients are often politically connected corporations—like America's sugar producers.

The industry gets billions of dollars in special deals while deceitfully running ads that say, "American farmers don't get subsidy checks."

That ad confused me. If they "don't get subsidy checks," then what is America's multibillion-dollar sugar program?

"It costs taxpayers nothing," claim ads from the American Sugar Alliance. "We are a no-cost program, no cost to the taxpayer."

"That's absolutely bogus," says Ross Marchand of the Taxpayers Protection Alliance in my newest video. Americans "pay as customers and they pay as taxpayers." He's right.

We pay several billion dollars extra every year, with "all of that money going to that handful of rich politically connected growers."

Several companies—Amalgamated Sugar, Michigan Sugar, and Western Sugar Cooperative—get three forms of handouts:

1. Subsidies when sugar prices fall below a certain level.

2. Protection from foreign competition (a limit on imports).

3. A guarantee that prices stay high (the sugar program imposes quotas on how much sugar may be produced in America).

"These are Stalin-style price controls and supply controls," says Marchand. "It does not help anyone."

Well, it helps big sugar.

The price of its product is roughly doubled by these rules, so Americans pay the politically connected owners about $4 billion dollars extra.

Why does such a scam persist?

One reason it hasn't been repealed is, well, Washington rarely repeals any handout. But also, this one costs most of us just $10 or $20 a year. We won't go to Washington to lobby over that.

But companies that get the subsidies sure do. Creighton University economist Diana Thomas says, "Each American sugar farmer made roughly $3 million a year extra" from America's sugar program. "Each is willing to spend a lot of time and money making sure that the law stays that way."

Finally, Big Sugar is very good at deceiving politicians and the media.

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  • Conchfritters||

    I'm ok with subsidies for Amalgamated Sugar - they're the Best - the BEST!!!

  • Liberty Lover||

    Even with subsidies sugar is in trouble in this country. Corn (corn syrup) has much larger subsidies.

  • Adans smith||

    They don't call the U.S government Uncle Sugar for nothing.

  • Shirley Knott||

    Are we ever going to talk about tobacco subsidies?
    They are even more perverse than the obscene sugar subsidy.
    Tax dollars to fight obesity, tax dollars to fight smoking and smokeless tobacco.
    While subsidizing both products.

    It's a full employment act for bureaucrats.

  • SIV||

    Tobacco subsidies are long gone.

  • Shirley Knott||

    The federally subsidized crop insurance program provides millions to tobacco farmers.
    That's hardly "long gone."

  • albo||

    First you get the lobbyists, then you get the subsidies, then you get the women.

  • awildseaking||

    The logic behind retaliatory protectionism is that when other countries don't respect principles of free trade, we're better off in the long run equalizing the playing field. The argument for lower prices always stops several steps short because it is merely a microeconomic analysis of a single commodity and not a macroeconomic analysis of the benefits from domestic industry and subsequent spending within our borders. As inefficient as tariffs are at a microeconomic level, it is absolutely indisputable that the money you save buying foreign goods does not necessarily produce a similar level of purchasing from the US. Even if it did, that spending is isolated to certain exportable industries. Understandably so, the Chinese don't fly over here to eat at your local diner or use the laundromat.

  • SQRLSY One||

    Retaliatory protectionism is Government Almighty picking winners and losers, at the points of the guns of the Customs Police at the borders (and the shipyards and airports). Government Almighty is already WAAAAY the hell too big!

    Government Almighty should use persuasion, not coercion, in these matters... They can natter the hell out of my nabob about my horrible un-American buying habits; that's OK with me. But they are using GUNS to punish my wrong consumption (buying) habits! I object!

    What would you say to your next-door neighbor if he used guns to "persuade" you about your buying habits?

  • Architect of Liberty||

    Get rid of ALL GOV'T SUBSIDIES -- this includes not only sugar and all the other ag-related hand-outs, but also Social Security, Medicaid, and Medicare.

  • Uncle Jay||

    Well, yeah, the rich should get government subsidies too.
    After all, they don't have enough money as it is.

  • DrZ||

    All this talk of sugar is making me hyperglycemic.
    The growers sure have a sweet deal and their bank accounts are growing obese thanks to Uncle Sugar Daddy.

  • AD-RtR/OS!||

    We've had this argument for 60-years, or more. Time to let the sugar farmers of Florida sink or swim.


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