Sunday, November 19, 2017
Opinion

Column: Sweet sugar subsidy

RECOMMENDED READING


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: Good for Tampa council member Frank Reddick to appeal for community help to solve Seminole Heights killings

As the sole black member of the Tampa City Council, Frank Reddick was moved Thursday to make a special appeal for help in solving four recent murders in the racially mixed neighborhood of Southeast Seminole Heights. "I’m pleading to my brothers. You ...
Published: 11/17/17
Editorial: It’s time to renew community’s commitment to Tampa Theatre

Editorial: It’s time to renew community’s commitment to Tampa Theatre

New attention to downtown Tampa as a place to live, work and play is transforming the area at a dizzying pace. Credit goes to recent projects, both public and private, such as the Tampa River Walk, new residential towers, a University of South Florid...
Published: 11/17/17
Editorial: Rays opening offer on stadium sounds too low

Editorial: Rays opening offer on stadium sounds too low

The Rays definitely like Ybor City, and Ybor City seems to like the Rays. So what could possibly come between this match made in baseball stadium heaven? Hundreds (and hundreds and hundreds) of millions of dollars. Rays owner Stu Sternberg told Times...
Published: 11/16/17
Updated: 11/17/17
Editorial: Wage hike for contractors’ labor misguided

Editorial: Wage hike for contractors’ labor misguided

St. Petersburg City Council members are poised to raise the minimum wage for contractors who do business with the city, a well-intended but misguided ordinance that should be reconsidered. The hourly minimum wage undoubtedly needs to rise — for every...
Published: 11/16/17

Editorial: Make workplaces welcoming, not just free of harassment

A federal trial began last week in the sex discrimination case that a former firefighter lodged against the city of Tampa. Tanja Vidovic describes a locker-room culture at Tampa Fire Rescue that created a two-tier system — one for men, another for wo...
Published: 11/15/17
Updated: 11/17/17
Editorial: Firing a critic of his handling of the sewer crisis is a bad early step in Kriseman’s new term

Editorial: Firing a critic of his handling of the sewer crisis is a bad early step in Kriseman’s new term

Barely a week after St. Petersburg Mayor Rick Kriseman promised to unite the city following a bitter and divisive campaign, his administration has fired an employee who dared to criticize him. It seems Kriseman’s own mantra of "moving St. Pete forwar...
Published: 11/15/17
Updated: 11/16/17
Editorial: USF’s billion-dollar moment

Editorial: USF’s billion-dollar moment

The University of South Florida recently surpassed its $1 billion fundraising goal, continuing a current trend of exceeding expectations. At 61 years old — barely middle age among higher education institutions — USF has grown up quickly. It now boast...
Published: 11/14/17
Updated: 11/17/17
Editorial: Vets should not have to wait years for benefits

Editorial: Vets should not have to wait years for benefits

American military members hurt in service to their country should not have to wait a lifetime for the benefits they deserve. But that’s a reality of the disability process at the U.S. Department of Veterans Affairs, which hasn’t made payi...
Published: 11/14/17

Editorial: Deputies’ rescue reflects best in law enforcement

The bravery two Hillsborough County sheriff’s deputies showed a week ago is a credit to them and reflects the professionalism of the office.Deputies Benjamin Thompson and Trent Migues responded at dusk Nov. 11 after 82-year-old Leona Evans of Webster...
Published: 11/13/17
Updated: 11/17/17

Another voice: An untrustworthy deal with Russia

President Donald Trump’s latest defense of Russian leader Vladimir Putin included — along with a bow to his denials of meddling in the U.S. election — an appeal to pragmatism. "Having a good relationship with Russia is a good thing, not a bad thing,"...
Published: 11/13/17
Updated: 11/14/17