Citizens for a Sound Economy (CSE) today denounced the Department of Agriculture’s plan to bail out big sugar companies. Said Patrick Burns, Director of Environmental Policy at CSE, “This is one of the most outrageous cases of corporate welfare we’ve seen in some time. What’s worse, it’s welfare that will continue the degradation of one of America’s most valued national treasures – the Florida Everglades.”
The government bailout would involve spending $60 million in taxpayer funds to purchase 150,000 tons of sugar. Sugar growers recently have been threatening to forfeit to the government at least $550 million worth of the crop, which was pledged as collateral on federal marketing loans.
While $60 million represents the direct cost to taxpayers, the indirect cost reaches into the billions – because government policies protect domestic sugar farmers from having to compete in the market. Essentially, the government guarantees the farmers a minimum price through loan programs and quotas on sugar imports. Growers who put their sugar up as collateral for a loan can forfeit their crop to the government if the price falls below the set price floor.
What this means is American consumers pay artificially high prices both for sugar, and for every product that uses sugar.
“According to the General Accounting Office, the sugar program costs consumers $1.4 billion a year,” continued Burns, “with most of that money going into the hands of a small but privileged group of wealthy sugar producers. This is enough money to pay for Everglades restoration.”
Regrettably, higher prices are not the federal sugar subsidy’s only costs. The program’s guaranteed price has been a significant cause of the environmental destruction of the Everglades ecosystem.
“It boggles the mind that the federal government will, on the one hand, propose to spend 11 billion taxpayer dollars to ‘restore and preserve’ the ‘Glades,” said Burns, referring to the controversial Comprehensive Everglades Restoration Plan (CERP), “while on the other hand continue a perverse subsidy that furthers its destruction. Vice President Al Gore has made this project a major platform plank in his campaign, so where is he on this?”
Of the 700,000 acres that make up the Everglades Agricultural Area, nearly 500,000 acres is used to grow sugar. The program’s inflated sugar prices cause farmers to over use inputs such as fertilizers which degrade waters with excessive levels of phosphorous. It has also encouraged the artificial consumption of wetlands for agricultural uses
“What is really our priority here? Environmental restoration? Or the continued destruction of the Everglades for the sake of a privileged few?” concluded Burns.