Sugar Subsidies Remain Costly to Taxpayers, Consumers

(Washington, D.C.) - The Council for Citizens Against Government Waste (CCAGW) called on Congress to end the sugar program.  Despite efforts to mask their true costs, sugar subsidies continue to add to the nation’s current and future budget deficits.  The negative impact of the sugar program on consumers is greater than ever.

The Congressional Budget Office projects a cost of $760 million over 10 years for the Feedstock Flexibility Program, which is set up to force the federal government to purchase surplus sugar from large sugar processors and then re-sell it to ethanol plants, at a loss. Taxpayers are on the hook for the difference.  The program, created in the 2008 farm bill, is tied directly to the main sugar price support program, and is designed to mask the true costs of the program. 

“The Feedstock Flexibility Program is the exact opposite of transparency in government,” Schatz said.  “It constitutes government by subterfuge and gimmickry.  The sugar lobby pushed this program through Congress to hide the true costs of these outlandish price supports.”

“By shifting the surplus sugar and the costs to the new sugar-to-ethanol program, the sugar lobby can pretend that sugar price supports operate at ‘no net cost.’  That is a myth,” said Schatz.

In the current market, with retail sugar prices at record highs, the government can alleviate the problem temporarily by allowing in more imports of sugar from the world market.  The Department of Agriculture announced a modest import increase last week, but not enough to fully supply the market, in the view of most experts. 

“Federal sugar subsidies are not only costly, they are also protectionist.  Some members of Congress run for cover behind the ‘no net cost’ myth.  The truth is:  big net cost.  By keeping foreign sugar out of our markets, the government is knowingly shifting the cost burdens onto consumers and taxpayers.  The Secretary of Agriculture has the authority to permit more imports, and while last week’s action was a good start, additional import quota expansion is needed now,” concluded Schatz.

CCAGW is the lobbying arm of Citizens Against Government Waste, the nation’s largest nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government.

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