Senator Lugar Wants to End America's Sugar Cartel

Includes: SGAR, SGG
by: Mark J. Perry

The chart above shows that U.S. sugar prices have averaged twice the world price (28.1 cents per pound vs. 14.4 cents) since 1980 (data here), because of tariffs and quotas that restrict the amount of foreign sugar allowed to enter the U.S. and thereby protect domestic beet sugar producers against more efficient foreign producers of sugar cane. I've estimated before that our sugar policy cost U.S. consumers of sugar $2.5 billion in 2009 and $4.5 billion in 2010.

Senator Richard Lugar (R-Indiana) has introduced the "Free Sugar Act of 2011," which would "free Americans from government control of sugar prices," and "create a free market in sugar, free small businesses and consumers from paying government-inflated food prices, and free sugar producers from the commands of Washington."

Here's a recent op-ed by Sen. Lugar in the Washington Time titled "Sweet Deal for Big Sugar," where he writes:

Our sugar policy imposes a hidden tax of billions of dollars annually on consumers and businesses and has destroyed thousands of U.S. manufacturing jobs. It substitutes the federal government for the private sector in basic decisions about buying and selling, supply and price.

This sweet deal for sugar producers is a sour one for consumers. Food and candy manufacturers are prominent victims, but also hurt are hundreds of thousands of small businesses, including bakeries, confectioners and restaurants. It makes no sense to place extra costs on small businesses, the main engines of job growth.