Sunday, May 27, 2018
Opinion

Column: Sweet sugar subsidy

Cut by cut, the forced budget reductions known as the sequester are beginning to affect millions of Americans.

Head Start education programs for low-income students are being slashed. So are medical services for 2 million American Indians living on reservations and in Alaska.

The Army is suspending tuition assistance for soldiers hoping to enroll in classes, while scholarship funds have been curtailed for children of troops who were killed in combat.

And the U.S. Department of Agriculture will furlough 6,200 food inspectors for 11 days this summer, which the agency says will create an $8 billion delay in meat exports.

Still, not everyone who depends on the federal government is suffering in these austere times.

According to the Wall Street Journal, the USDA is on the verge of purchasing 400,000 tons of sugar in a massive bailout of domestic sugar processors. The move would cost taxpayers about $80 million.

It's the sweetest of deals for the big companies that grow cane and beets. For years the government has guaranteed an artificially high price for American sugar, undercutting foreign competitors and inflating consumer prices for everything from soft drinks to breakfast cereal.

Last year, sugar processors under the price-support program borrowed $862 million from the USDA. The loans were secured with about 2 million tons of sugar that was expected to be harvested.

And the harvest was very good. Too good, apparently. The market got flooded.

Between February 2012 and February 2013, the price of beet sugar fell from 51 cents a pound to about 28.50 cents. Raw cane dropped from 33.57 cents to 20.72 cents.

Consequently, the government's loans to processors are in danger of default. To avoid that, the USDA would take all the sugar and sell it at a discount rate to producers of ethanol, who'd mix it with the corn from which that fuel is distilled.

The transaction would result in Uncle Sam losing 10 cents on every pound of sugar sold, which adds up to an $80 million hit on 400,000 tons of product.

What a brilliant system.

The major beneficiaries of this bailout would be cane growers in Florida and beet operations in Minnesota, Michigan and North Dakota. Big Sugar has outsized political clout in Washington, as evidenced by the silence of so-called fiscal conservatives.

Heavy campaign contributions are spread among Democrats and Republicans alike. Barack Obama took money from the sugar industry, as did Mitt Romney. Hefty donations went to both of Florida's senators, Bill Nelson and Marco Rubio.

Every time somebody in Congress tries to kill the sugar subsidy, the measure gets voted down — by some of the same lawmakers who love to rail against public spending on welfare benefits, health care and education.

In Florida, the bitter taste of the sugar subsidy goes back decades. The program helped to make multimillionaires out of people who prolifically polluted the Everglades, and who for years fought all efforts to make them clean up their waste water.

(One of the state's largest cane producers, U. S. Sugar, said earlier this month that it has no outstanding USDA loans. The government hasn't provided a list of the sugar companies that would gain from the bailout.)

Those who defend Big Sugar say price supports don't really cost taxpayers anything — except, of course, when the price of sugar dives.

And, not that Americans need an incentive to buy more Snickers bars or guzzle more Mountain Dew, but subsidies jack up consumer costs by about $3.5 billion annually, according to a study by Iowa State University.

If you're in the sugar business in this country, you can depend on politicians to restrict imports and guarantee a set price for your crop — the antithesis of free-market competition.

It's not a one-time shot, either. It's an ongoing gush of entitlement.

While we're cutting scholarships for the children of dead war heroes.

© 2013 Miami Herald

Comments
Editorial: Welcome Bayshore changes still canít stop bad judgment

Editorial: Welcome Bayshore changes still canít stop bad judgment

Itís human nature in following any tragedy to imagine: How could this have been prevented? On that score, the city of Tampa responded appropriately to the deaths this week of a mother and her toddler whom police say were hit by a teenage driver racin...
Published: 05/25/18
Editorial: Filling Rocky Point lagoon to build townhomes is an empty-headed idea

Editorial: Filling Rocky Point lagoon to build townhomes is an empty-headed idea

One of the worst ideas in a long time in the field of urban planning received a blessing this month when the Hillsborough County City-County Planning Commission approved a land-use change for a project that calls for filling three acres of water insi...
Published: 05/25/18
Editorial: Searching for the real Adam Putnam

Editorial: Searching for the real Adam Putnam

Send out an Amber Alert for Adam Putnam. The red-haired, affable fellow who has served capably as a state legislator, member of Congress and agriculture commissioner is missing. In his place is a far-right caricature who has branded himself as a prou...
Published: 05/24/18
Updated: 05/25/18
Editorial: A strong economic case for restoring voting rights for felons

Editorial: A strong economic case for restoring voting rights for felons

Floridians are paying a steep price for a system that makes it as difficult as possible for people who leave prison to reintegrate into civic life. Gov. Rick Scottís clemency process isnít just archaic and cruel ó it also wastes enormous public resou...
Published: 05/24/18
Updated: 05/25/18
Editorial: Trump right to cancel North Korea talks on nuclear weapons

Editorial: Trump right to cancel North Korea talks on nuclear weapons

Regardless of the reason, the cancellation of the U.S.-North Korea summit to address Pyonyangís nuclear program is hardly the worst possible outcome of this high-stakes diplomatic gamble. President Donald Trump was unprepared, North Koreaís Kim Jong ...
Published: 05/24/18
Updated: 05/25/18

NFL kneels before the altar of profits

The owners of the 32 National Football League teams sent a wrongheaded and, frankly, un-American message to their players Wednesday: Expressing your opinion during the national anthem is no longer permitted."A club will be fined by the League if its ...
Published: 05/24/18

Editorial: A positive first step in ensuring student access at USFSP

As a task force sorts out countless details involved in folding the University of South Florida St. Petersburg back into the major research university based in Tampa, ensuring access for good Pinellas students remains a concern. An enhanced cooperati...
Published: 05/23/18
Updated: 05/25/18
Editorial: Banks still need watching after easing Dodd-Frank rules

Editorial: Banks still need watching after easing Dodd-Frank rules

Legislation that waters down the 2010 Dodd-Frank law and was sent to President Donald Trump this week is a mixed bag at best. Some provisions recognize that Congress may have gone too far in some areas in the wake of the Great Recession to place new ...
Published: 05/23/18
Updated: 05/24/18
Editorial: Honoring our fallen soldiers on Memorial Day

Editorial: Honoring our fallen soldiers on Memorial Day

The rising tensions with Iran, the resurgence of violence in the Mideast and the uncertainty over a nuclear disarmament deal with North Korea combine to create an unsettling time this Memorial Day. These grave threats to peace are another reminder of...
Published: 05/22/18
Updated: 05/25/18

Another voice: The chutzpah of these men

A new phase of the #MeToo movement may be upon us. Call it the "not so fast" era: Powerful men who plotted career comebacks mere months after being taken down by accusations of sexual misconduct now face even more alarming claims.Mario Batali, the ce...
Published: 05/22/18
Updated: 05/23/18