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During testimony today before the Ways and Means Trade Subcommittee, Citizens for a Sound Economy Director of Research Michael Becker advocated modifying, and and eventually eliminating entirely, the sugar program. “Due to the sugar program,” testified Becker, “CSE’s members, along with consumers in general, each year pay excessive prices for food simply to enrich the small group of sugar farmers and corn refiners who benefit from the sugar program.”
Becker asserted that the sugar program is one of the worst protectionist programs in that it not only hurts consumers directly in the form of higher prices, but undermines U.S. trade policy. “Indeed, the sugar program is typical of the inconsistencies that seem to underlie U.S. trade policy,” noted Becker. “On the one hand, the U.S. rails against protectionist policies of other governments. On the other hand, programs such as the sugar program make it clear that the United States itself has many protectionist policies.”
Becker remarked that if the support price for sugar dropped by 6 cents, consumers would save roughly 30 cents on a five-pound bag of sugar, or 8 cents on a 12-pack of soda. “Perhaps sugar growers or corn refiners are so rich that they consider such savings not worth it; the average consumer would probably disagree,” suggested Backer. He further cited a Department of Commerce study which estimated in 1988 that the sugar program cost U.S. consumers over $3 billion annually.
Becker disputed the claim that eliminating the sugar program would cost jobs. Study after study has shown that overall protectionism costs jobs, as the jobs lost elsewhere in the economy more than make up for the jobs saved in the protected industry,” he noted. “Hence, eliminating the sugar program, on net, would create jobs.”
Becker concluded his testimony by endorsing proposals such as one by Rep. Thomas Downey (D-NY) and Rep. William Gradison (R-OH) which would modify the sugar program in order to gradually lower raw sugar prices. Such proposals are an important first step toward mitigating the sugar program’s negative effects upon consumers and the economy,” he remarked. Becker added that ultimately CSE would like to see the sugar program eliminated entirely. “We see no justification for the continued existence of such an anti-consumer program,” he remarked.