Sugar Subsidies

The Federal Sugar Program 101

Sugar Welfare®™ is growing a nutritionally useless crop using underpriced labor, getting rules and laws written that gives you indirect ownership of the public’s water, having the taxpayers pay to clean up the filth that pours off your land, all while evading actual market competition by receiving legal dispensation to overcharge for a product that’s harming us all and preventing clean freshwater from reaching the Everglades. 

Yes, it’s a mouthful. It’s also the truth.

It's been 80 years, it's time to end it.

A relic of the Great Depression, the federal sugar program is as outdated as it is outrageous. As a government-sanctioned cartel, it has created a can’t-lose deal for a concentrated group of 13 mega-processors sprinkled around the country – Florida Crystals and US Sugar are two of them. It is a complicated bureaucratic mess of price supports, market allocations, import quotas, and government guarantees that are ultimately covered by taxpayer and consumer dollars.

It’s corporate welfare and it’s turned millionaires into billionaires.

Their wealth comes from their sugar business, a business that relies on protectionist trade policies, low-interest loans from the government, and government-made-and-maintained drainage and infrastructure.

Vincent Smith, an agricultural economist and critic of the program, estimates the Fanjul family of Florida Crystals is “getting at least $150 million a year” in net benefits from the program, with another $25 million going to the Fanjul’s sugar enterprise in the Dominican Republic, Central Romana.

In the Kingdom of Big Sugar | Vanity Fair: This expose by Vanity Fair – Pepe and Afly Fanjul: The First Family of Corporate Welfare – is as applicable today as the day it was published 10 years ago. It is a must read if you care about common decency, fairness, corruption and America’s Everglades.

This federal sugar program actually funds political graft and it all starts here – the federal sugar program – where just 13 sugar entities in the US share a whopping $4 billion in taxpayer-funded corporate welfare every year. 

The subsidy has had one other consequence: it has helped create an environmental catastrophe in the Everglades and vital estuaries on both coasts of Florida, while putting into jeopardy the drinking water supply for more than 9 million Floridians. The taxpayers have spent roughly $3 billion (and counting) cleaning up sugar’s polluted runoff. It is likely to cost taxpayers more than $10 billion to repair the broken water management system by building new reservoirs and rerouting canals.

Within our swampy paradise lies yet another subsidy. Each year, according to estimates, the Army Corps of Engineers spends $73 million to control water flow in central and south Florida. This enables growers to obtain water when they need it or restrain the flow during heavy rains. Of the $73 million, the Corps estimates $62 million is spent mainly on sugarcane in the Everglades.

The elaborate plans, in effect contortions of infrastructure and water management, and the huge financial costs to the taxpayers, all are made as sugar-industry workarounds – as efforts to avoid disturbing the status quo for sugarcane growers.

Family farm? Nope. Corporate greed? You bet. *The role of the “subsidy” providers played by the taxpayers. *The role of “farmer” played by Gaston Cantens of Florida Crystals, with some MacFakester “environmental” actors in tow.

Listen to Farmer Pete spell out the insidious nature of farm subsidies, his firsthand account of how the scheme works, and how it rewards corporate agriculture (we’re looking at you, Florida Crystals and U.S. Sugar) while distorting the markets for true family farms. 

Your tax dollars are funding Big Sugar’s political operations

The sugar industry has used the subsidy windfall to fund political candidates, campaigns, consultants, law firms, and lobbying efforts in Tallahassee and Washington to monopolize water and drainage in the Everglades Agricultural Area, and to force taxpayers to bear the costs of cleaning up its pollution.

Their wealth comes from their sugar business, a business that relies on protectionist trade policies, low-interest loans from the government, and government-made-and-maintained drainage and infrastructure.

Consider this: From 2017 to 2022, Big Sugar has poured more than $40 million into the coffers of state politicians (doesn’t include local or federal contributions). And that number is just what we can prove using data from the Florida’s Division of Elections website. 

Florida Division of Elections: Campaign Finance Database

The political power this program has given to sugarcane producers continues to wreak havoc on our state’s tourism, fishing, and real estate economies. All of these depend on clean water, which is blocked, diverted and muddied by the industry’s practices and stranglehold on policymakers.

To summarize: Your hard earned dollars have funded $40+ million in five years to scores of politicians – that dollar amount doesn’t include paying for all the lobbyists, law firms, and consultants – just in the State of Florida. But heck, what’s $20 million a year amongst friends?

American sugar production is one of the most protectionist sectors of the nation’s economy.

1.  The sugar program primarily benefits wealthy plantation owners. The benefits of the sugar program primarily go to 13 sugar processors in a handful of states.

2.  U.S. sugar producers should not be in a “protected class” where they do not face market forces or have any competition.

3.  In trade negotiations, when the United States carves out protections for one commodity, it allows our trading partners to do the same – thereby closing potential new markets for other American farmers.

4.  In no other program does the federal government take so much from so many to give to so few.

MUST WATCH: John Stossel explains the corporate welfare program that is literally financing, through political contributions and outrageous graft, the destruction of the Everglades, our waterways and the livelihood of too many Floridians. Big Sugar has rigged many systems. The time has come to un-rig them.

The federal sugar program is designed to operate as a government-sanctioned cartel.

1.  Government obligations established by the sugar program have served to create a sugar cartel that is contrary to the interests of American consumers, workers and taxpayers.

2.  The federal government controls sugar production volumes and assigns quota for the cane and beet factions within the cartel.

3.  The sugar program obligates the government to buy any excess sugar and sell it at a hugely discounted price to ethanol producers.

4.  The combined effects of limits on domestic production and imports, industry loans and forced purchases pushes U.S. prices to nearly double what the rest of the world pays for sugar.

Frequently Asked Questions

What is the U.S. sugar program?

The U.S. sugar program is a complicated tangle of price supports, market allotments, import quotas, taxpayer subsidized crop insurance, and government-guaranteed loans that artificially inflate the price of sugar.

The current sugar program keeps sugar prices artificially high in a few ways:

1.  Limits how much domestic sugar can be grown and sold in the U.S.

2.  Limits imports, even though domestic supply does not meet demand

3.  Maintains a floor on the price of sugar sold in the U.S.

Who benefits from the sugar program?

This outdated and outrageous program has created a “can’t-lose” deal for a group of 13 megaprocessors sprinkled around the country, including Florida. It enables them to operate at zero risk year-in and year-out, while American small businesses and manufacturers get zero access to an adequate supply of sugar at a fair price.

Why should Congress reform the U.S. sugar program?

The hidden costs of the sugar program are baked into every food, snack, and treat at no benefit to the American consumer. After 80 years of stagnant U.S. sugar subsidy policy, the U.S. is now home to some of the highest sugar prices of any major market in the world. It protects the wealthiest of the wealthy while damaging the ability of America’s businesses – big or small – to compete and create jobs.

Is it true the current sugar program operates as a "no net cost" program?

No. The U.S. sugar program is a multi-billion-dollar annual transfer from American consumers and businesses to sugar producers. It is effectively a hidden tax that costs Americans $2.4-$4 billion a year. The Heritage Foundation estimates that since 2000, Americans have paid almost $50 billion in hidden costs to support the sugar program.

What is the quantifiable impact of the U.S. sugar program on American jobs?

The sugar program has cost 123,000 American jobs between 1997 and 2015, according to the U.S. Census Bureau. The U.S. Department of Commerce estimates that for every sugar-growing job saved through high U.S. sugar prices, approximately three American manufacturing jobs are lost.

How should the program be modernized?

The Fair Sugar Policy Act — introduced with strong bipartisan support across both houses of Congress — will apply fair and sensible adjustments to the stagnant U.S. sugar subsidy policy. This broadly popular legislation — opposed by a small handful of sugar processors who have unfairly benefited from the system for 80 years — will increase competitiveness of U.S. businesses and decrease the hidden tax imposed on American families by the current U.S. sugar program.