TAXPAYER WATCHDOG GROUP SAYS STICKY SUGAR SITUATION PROVES PROGRAM MUST END

For Immediate Release Contact: Jim Campi or Aaron Taylor
March 28, 2000 (202) 467-5300

 

(Washington, D.C.) — John Frydenlund, Director of the Center for International Food and Agriculture Policy at Citizens Against Government Waste, today reacted to media reports that the Department of Agriculture may pay $110 million to prop up U.S. domestic sugar prices.  Following is Frydenlund's statement.

"It is an outrage that special interests are trying to require the Secretary of Agriculture to purchase as much as 250,000 tons of sugar and then either 'donate' the sugar abroad or sell it at a 'fire sale price' to be made into ethanol.

"Such proposals are nothing more than a thinly-veiled attempt to cover-up for the gross inadequacies of the archaic U.S. sugar program.  The sugar program severely restricts sugar imports and supports the domestic price at a level that is at least twice the world price.  The benefits go overwhelmingly to a small cartel of wealthy sugar producers, with some individuals pocketing as much as $65 million a year.

"This costs American consumers at least $1 billion annually and has forced over 75% of U.S. sugar refineries that process raw sugar to close down, which has wiped out thousands of jobs.  Yet, defenders of the sugar program have always claimed that the program does not cost the taxpayers anything.  However, this latest development demonstrates that such claims are pure fantasy.

"If the federal government purchases this “surplus” sugar, it will cost the taxpayers approximately $110 million.   On top of that, the government will then turn around and subsidize big ethanol companies like Archer Daniels Midland (ADM) by giving them the taxpayer-subsidized sugar at bargain basement prices.  ADM is already one of the biggest beneficiaries of the sugar program.

"This whole episode proves what CAGW has been saying for years: the U.S. sugar program is a boondoggle, and the only way to 'fix' it is to eliminate it before it does any more damage to the entire economy."     

The Center for International Food and Agriculture Policy was established in 1997 to implement CAGW’s long-standing goal of dismantling Depression-era agricultural price supports and regulations. Citizens Against Government Waste is a nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, mismanagement and abuse in government.

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