Corporate Welfare: Why Does The U.S. Government Inflate The Price Of Sugar?

When I was a young boy, Grandpa would give me a dollar bill and I would go down to the local grocery store to buy as many candy bars as I could for him.  Naturally, I would always pick the candy that I liked best.  It would always take me a very long time to decide what to buy, as at the time most if not all candy bars cost only a nickel.  Nowadays, you are lucky if you can get one candy bar for a dollar.  Granted, that was a very long time ago, however, since 1789, U.S. policy and thus the price of sugar has been determined not by supply and demand, which is true capitalism, but by our federal government when Congress first imposed a tariff on foreign sugar imports.  The original intention of this tariff was to provide much needed revenue for this nation; however, it has also resulted in the U.S. price of sugar being historically higher than that of the world market.  Over the years, the American price of sugar has been double, triple or even quadruple the world price.  At one time, the U.S. price was twenty-one cents a pound when the world price was less than three cents.

It was announced earlier this week that the Department of Agriculture is thinking of purchasing 400,000 tons of sugar to artificially support falling sugar prices, which have fallen nearly twenty percent since last fall.  The pending purchase is thought to be a means of helping prevent sugar processors from defaulting on nearly a trillion dollars in government loans under a federal price support program.  Falling sugar prices are the result of a bountiful crop last year of both sugar beets and sugar cane in this country.  This acquisition of sugar would benefit those companies that turn the cane and beets into granulated sugar.  Pierson Bob Clair III, CEO of Brown And Haley, a candy maker and distributor based in Washington state has been quoted as saying, “Clearly, the USDA has made up its mind that Big Sugar is going to trump the American consumer.”

We, as a nation, profess to worship at the feet of capitalism, yet once again, it is consumers and taxpayers who pay the price for government intervention into the corporate world, be it price inflated tariffs, bailouts, subsidies or tax laws that allow huge corporations such as GE, Microsoft, Apple, IBM, Chevron, ConocoPhillips, Boeing, Mattel, ExxonMobil, DuPont or Verizon to pay very little if any federal tax.  I did not agree with Republican candidate Mitt Romney often, if at all during last year’s presidential campaign, however, I did agree with him when he stated “We ought to get rid of subsides and let markets work properly,” referring to the sugar industry during his campaign last year.   How does this industry get away with financial thievery?  The simple answer, as always the case, is money.  The sugar industry grows less than two percent of the total dollar valuation of all U.S. grown crops, however sugar lobbyists spend more than a third of the total of all American grown crops lobbying all the while Big Sugar campaign contributions to political action committees (PACs) are more than the total of all other American grown crops contributions combined.

For all the talk of welfare queens robbing this nation blind, living high on the hog all the while driving brand new Cadillac Escalades, it is corporate welfare that is truly a disgrace!

Steven H. Spring

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