In June of this year the farm bill moving through Congress gave the House and Senate a chance to cut farm subsidies.

The Sugar Racket

[snip] Congress has provided a sweet deal for sugar growers since it imposed import tariffs on sugar in 1789. Controls on domestic sugar production date back to the Jones-Costigan Act of 1934.

[snip] By reforming sugar policies, they could cut food costs for average families, make U.S. manufacturing more competitive, and end unfair benefits for a small group of wealthy sugar barons.

Components of the Sugar Program
The purpose of U.S. sugar policies is to keep domestic prices artificially high. In recent decades, U.S. sugar prices have been typically two or more times higher than prices on world markets.[snip]

Guaranteed Prices.
The U.S. Department of Agriculture runs a complex loan program to support sugar prices. The USDA makes loans to sugar processors, who use their sugar as collateral. In return, processors agree to pay sugar growers certain minimum prices. If the market price of sugar rises, processors can sell their product on the market and pay back the loan. If the market price falls, processors can forfeit their sugar to the government and not repay their loans. The effect is to guarantee prices for both processors and growers. Sometimes other techniques are used to prop up prices, such as paying producers to discard their current inventories.

Trade Restrictions.
[snip] The government applies a two-tiered system of “tariff rate quotas” to limit imports. A lower “in-quota” tariff rate is for imports within a set quota volume. A higher “over-quota” rate applies to imports in excess of the quota. [snip]

Production Quotas.
In addition to controlling sugar imports, the government imposes quotas, or “marketing allotments,” on U.S. production. Each year, the USDA decides what total U.S. sugar production ought to be and then allots it 54.35 percent to beet sugar and 45.65 percent to cane sugar. [snip]
In sum, the sugar industry is a cartel that is centrally planned from Washington.

Effects of the Sugar Program
The taxpayer cost of sugar subsidies is expected to be $1.4 billion over the next decade. More important, federal sugar policies burden American consumers by creating high prices for sugar and for products that contain sugar. The Government Accountability Office estimated that federal sugar policies impose costs on sugar consumers of $1.9 billion annually.

Last year the U.S. Department of Commerce studied the economic effects of federal sugar policies and released a damning report that had five key findings:

• Employment in U.S. food businesses that use substantial amounts of sugar is declining.
• For each sugar-growing and sugar-harvesting job saved by current sugar policies, nearly three confectionary manufacturing jobs are lost.
• Sugar costs are a major reason why some U.S. sugar-using businesses are relocating their factories abroad.
• Numerous food companies have relocated to Canada, where sugar prices are less than half of U.S. prices, and Mexico, where prices are two-thirds as high.
• Imports of food products that contain sugar are growing rapidly because it is not competitive to manufacture those items in the United States.

[snip] Chicago, once the nation’s candy-manufacturing capital, has been hit hard with thousands of lost jobs. Candymaker Fannie May closed its factory in 2004, and Brach’s moved its candy production to Mexico in 2004 blaming high sugar prices. Kraft moved its 600-worker LifeSavers factory from Michigan to Canada in 2002 to access low-cost sugar. Hershey Foods closed plants in Pennsylvania, Colorado, and California and relocated them to Canada.

Sugar policies also cause environmental damage. Large areas of the Florida Everglades have been converted to cane sugar production because of federal protections and subsidies. Sugar production damages the Everglades by land drainage, habitat destruction, and the run-off of chemicals in the fertilizers used by sugar growers.

Conclusions
Given the negative economic and environmental effects of U.S. sugar programs, why do they persist? Because Congress often decides to confer benefits on a favored few at the expense of the general public. In this case, the favored few really are few—about 42 percent of all sugar program benefits go to just 1 percent of sugar growers. [snip]

The Washington Post lamented the political corruption caused by the federal “sugar racket.” More than that, sugar policies are a textbook case of economic damage done by big government intervention in the marketplace. [snip]

In winning the House last year, Democrats portrayed themselves as reformers willing to take on special interests for the benefit of average families. They also promised to run the most ethical Congress in history.

This one small sample of the damage done by congress to the economy is an ice cube to an iceberg. Large corporations such as ADM, Union Pacific, (yup, they farm just enough to collect the loot) among others receive the majority of what we think is going to Ma and Pa Kettle.

The price of wheat, corn, rice, soybeans and other grains are at all time highs. Ethanol use as a fuel raised corn so high that most production is going to fuel, not food. Milk price per hundredweight escalate yet we are subsidizing large and small farms for the production.

All this is a tax on your food, paid before the harvest. Meat and poultry prices shoot up as the outlay for feed climbs. Add the expense of shipping as fuel-operating costs rises; add the middlemen’s appropriation plus the retailer’s revenues to the subsidies for your costs.

Congress takes care of their donors, quite well and they will damn the public to enrich their coffers. The GOP punted on this in 1996 and 2000. So, don’t hold your politicians harmless. Very few of them are untainted. Perhaps the following will help with your ideas of how good the Democrats are.

Farm bill expanding subsides, food stamps passes Senate

WASHINGTON (AP) – The Senate on Friday approved a $286 billion farm bill with an election-year expansion of subsidies for growers and food stamps for the poor.

The bill, passed on a 79-14 vote, expands subsidies for wheat, barley, oat, soybeans and several other crops and creates new grants for vegetable and fruit growers.

It also increases loan rates for sugar producers, extends dairy programs and provides more dollars for renewable energy and conservation programs to protect environmentally sensitive farmland over the next five years.

Enjoy dinner.

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