Iowa Public Television


GOP Debate Casts Light on U.S. Sugar Policy

posted on January 27, 2012

TAMPA, Fla. (AP) - The Republican presidential race waded, at
least for one night, into the grainy details of U.S. policy toward
     Newt Gingrich's answer to a question about it during a GOP
debate Monday night stood out in part for its wonkiness and
downright oddity.
     "I found out one of the fascinating things about America, which
was that cane sugar hides behind beet sugar," the former college
professor said, launching into a lecture of sorts on the U.S.
industry when asked about subsidies for the sweet ingredient. "And
there are just too many beet sugar districts in the United States.
It's an amazing side story about how interest groups operate. In an
ideal world, you would have an open market."
     Mitt Romney, the former Massachusetts governor, followed up by
saying "we ought to get rid of subsidies and let markets work
properly." The other two candidates, Rick Santorum and Ron Paul,
weren't given a chance to reply.
     Blogs and Twitter feeds lit up with the exchange, with some
observers using it to highlight similarities between Gingrich and
beet farmer Dwight Schrute on "The Office." Gingrich, in his
younger years, has been compared to the sitcom character.
     Pop culture aside, the exchange shed light on a largely unknown
facet of American policy: Congress' role in sugar dates to the
birth of the country.
     Import tariffs were imposed on sugar beginning in 1789 to give
incentive to American-grown product. An added layer of complexity
came in 1934, when controls on domestic sugar production were put
in place.
     In short, current sugar policies favor beet sugar growers in the
Great Plains and Upper Midwest and cane sugar growers in Florida
and Louisiana, keeping the prices of U.S.-grown sugar artificially
high and limiting the amount of foreign sugar that can be imported.
     "It's a Soviet system what we have for sugar," said Chris
Edwards, director of tax policy studies at the libertarian Cato
Institute. "It's not a market system."
     The Government Accountability Office last looked into the issue
in 2000 and found that U.S. sugar prices, at times, were three
times the world market price. Critics say that fact hurts much
larger industries such as cereal companies, bakers and candy
companies, who rely on sugar for their products.
     Those industries cheered at the mere mention of existing policy
during the debate.
     "I think it's time has come and gone," said Susan Smith, a
spokeswoman for the National Confectioners Association, which
represents candy, gum and chocolate makers and opposes current
policy. "Sometime, 80 years ago, there might have been a reason.
But now, not only does it hurt companies who have sugar as an
ingredient but there's also a huge consumer cost."
     The GAO estimated U.S. sugar policy cost consumers $1.9 billion
in 1998 and resulted in $900 million in net losses to the U.S.
economy. Nearly all the benefits, the report argued, went to the
wealthy owners of U.S. sugar companies.
     Both Republicans and Democrats have squandered chances to change
the policy. An analysis by the nonpartisan Center for Responsive
Politics, a Washington-based research group, shows the sugar
industry has given about $2.1 million in campaign contributions in
the 2012 election cycle.
     "It's very much a bipartisan racket," Edwards said.
     Judy Sanchez, a spokeswoman for U.S. Sugar Corp., the nation's
largest cane sugar grower, said the policies in place keep American
companies from going out of business. She said sugar policy has
"zero cost" to taxpayers.
     "Face it: Sugar is given away for free in restaurants, where
they charge you for water, they charge you for an extra slice of
cheese on your hamburger," Sanchez said. "The sugar is so
affordable that it's given away for free. That's because American
sugar policy works."

Tags: GOP race subsidies sugar policy U.S.