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OPINION: A Spoonful of Subsidies Makes Reason Go Down

Aug. 22, 1999

IN THAT sweet junction of politics and economics, sugar is a textbook case of all that goes awry.

The United States, a lush land whose citizens crave sugar -- in their Cokes and their Twinkies and their apple pies -- has seen fit since the Great Depression to protect the producers of sugar from the cruel vagaries of the market.

Why politicians have determined that it is in the national interest to protect sugar farmers -- not strawberry farmers, not dry cleaners, not lawn-mowing services, not secretaries -- from the vicissitudes of supply and demand is way beyond the capacity of a normal citizen's brain to comprehend.

So let's just accept the fact that sugar producers have their own special government program. And that it has been around for more than 65 years. And that sugar growers -- a small cadre that consists chiefly of a big Hawaiian cane company, two brothers who dominate the Florida cane business, and a few thousand sugar-beet farmers mainly in the upper Midwest -- contend that the world will come to an end if anyone messes with their program.

Every couple of years someone gets the foolish idea that this program serves no purpose other than to protect a handful of sugar growers at the expense of everyone else.

They make a quixotic run at it and always wind up flat on the ground. This year, it was Sen. Dianne Feinstein, D-Calif., and Rep. George Miller, D-Martinez, who failed on a 66-to-33 vote in the Senate this month to kill the program.

They attacked the program because the C&H refinery in Crockett says it can't get enough raw sugar to stay in business.

That's because Congress promises every U.S. sugar grower at least 18 cents a pound, no matter what. The government does this by restricting sugar imports.

Growers are ever quick to note that the sugar program operates at zero cost to taxpayers, which is true. It just costs U.S. consumers $400 million or so a year. But Americans can switch to Diet Coke, right? "How many of us have stacks and stacks of letters complaining about the price of a soft drink?" asked Sen. John Breaux, a Louisiana Democrat.

So every time sugar prices threaten to drop too low to support U.S. growers in the manner to which they are accustomed, the U.S. slashes sugar imports. It's not exactly high-wage work cutting cane all day with a machete under the hot sun in Guatemala or Guyana or any of the other places sugar is grown, often some of the poorest places on Earth. But so what if these workers lose their jobs, so long as U.S. sugar growers get their 18 cents a pound? Other than those whose livelihoods are tied up in the Crockett refinery, who cares? Certainly not politicians from Louisiana.

And who cares if sugar growers destroy the Everglades and taxpayers spend billions trying to undo the damage, so long as North Dakota's two Democratic senators, Byron Dorgan and Kent Conrad, can ensure high prices for their sugar-beet growers, who grow beets because cane prices are high?

And then there are all those Midwest corn farmers. U.S. sugar prices are kept so high that soft- drink makers switched decades ago to corn syrup, so now corn farmers like high sugar prices, too. With that, we may all rest assured that the sugar program will never die.

Carolyn Lochhead was the Washington correspondent for the San Francisco Chronicle, where she covered national politics and policy for 27 years. She grew up in Paso Robles (San Luis Obispo County) and graduated from UC Berkeley cum laude in rhetoric and economics. She has a masters of journalism degree from Columbia University. Twitter: @carolynlochhead

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