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Big Sugar and the Political Economy of US Agricultural Policy

4/1/05
Kimberly A. Elliott
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Sugar is a prototypical case of a policy that favors the few at the expense of the many. Thanks to a government policy that supports prices by sharply restricting imports, a small number of American sugar cane and beet growers are enriched at the expense of US consumers and of more efficient foreign growers, most of whom are in poorer developing countries. In addition, in Florida, sugar cane production contributes to degradation of the Everglades and, before it was mechanized in the mid-1990s, allegations of abusive labor practices were rampant. Competitive US exporters also pay a price because such blatant trade protection undermines the position of US negotiators seeking trade liberalization abroad. Sugar was excluded entirely from the “free” trade agreement with Australia, and it is the only sector in the agreement with Central America and the Dominican Republic (DR-CAFTA) that will retain some protection when the agreement is fully implemented. Even so, US sugar producers adamantly oppose the agreement and have vowed to defeat it when it is presented to the US Congress for ratification this year. According to the Organization for Economic Cooperation and Development, sugar receives proportionally more support from the US government than any other major crop.

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