Sugar subsidies out of date
Congress talks a lot about saving people money - and now we have a chance to put our money where our mouth is. That's why we are pushing for bipartisan, commonsense reform to an extravagant sugar price-support program that costs consumers and businesses an estimated $3.5 billion and 20,000 jobs each year.
Our efforts to reform the sugar program in the Senate garnered record-breaking support and came close to succeeding this summer. Now Congress needs to continue to build on that momentum. In doing so, we would protect consumers, help American companies compete and save taxpayers $72 million over 10 years.
Sugar is the most tightly controlled agricultural commodity in the nation. Current federal policies keep prices artificially high, benefiting about 5,000 wealthy sugar cane and sugar beet farmers at the expense of consumers and small businesses. Ultimately, sugar price supports are an unnecessary market intervention that has no place in America's 21st century economy.
The federal government also tightly controls the supply of sugar in the United States. Domestic producers are limited to strict quotas, and imports are severely restricted. Because of this, American manufacturers pay double the world's average price for sugar, which leads to higher prices at the grocery store. Artificially high food prices are bad for American families and bad for job creation. According to a 2006 Commerce Department study, for every sugar-growing job saved through high U.S. sugar prices, approximately three manufacturing jobs are lost.
Granite State Candy Shoppe, for example, is a small, family-owned candy manufacturing company in Concord, N.H. Sugar is the company's most important ingredient. As its owner, Jeff Bart, has explained, the artificially high cost of sugar has forced the company to raise prices and slow hiring.
In Indiana, a number of confectioners and bakers, such as the Albanese Confectionery Group Inc., face the challenge of artificially-high U.S. sugar prices every day.
The same is true in Pennsylvania, where Just Born Candy makes Mike and Ike candies and marshmallow Peeps from its home base in Bethlehem. According to Ross Born, Just Born Candy's co-president, "Sugar subsidies are another example of unfair federal intervention in the private sector that favors a small group. Those sugar subsidies artificially inflate the price of one of the staples of the candy industry and force us and many other companies to choose between absorbing the higher costs, passing the costs on to consumers or producing elsewhere."
These companies are just three businesses whose growth has been handicapped by an outdated, unnecessary government program.
The momentum for change is clear. The Consumer Federation of America and National Consumers League have joined business groups such as the U.S. Chamber of Commerce and the National Association of Manufacturers in support of reform. During Senate debate on the farm bill, we saw strong support for our amendments to reform the sugar program, significantly more than the last time similar legislation was introduced in 2001. We were encouraged by this growing bipartisan support. We need more of that in Washington.
As we look at ways to help American families and small businesses prosper, no group or program should be immune to change. Even programs with the best intentions can outlive their usefulness. The sugar program certainly has.
Shaheen is a member of the Senate Small Business and Entrepreneurship Committee. Lugar is a member of the Senate Agriculture Committee. Toomey is a member of the Senate Budget Committee.