The Farm Nutrition and Bioenergy Act, which cleared the House on Tuesday 318-106, is a cornucopia of boondoggles, rip-offs and handouts, but perhaps the most inexplicable part is the provision instructing the federal government to buy “surplus” sugar from sugar growers and then sell it to make ethanol. Taxpayers will buy overpriced sugar and then sell it to ethanol makers at an artificially low price — a sweet deal for sugar and ethanol barons, and a raw deal for taxpayers.
Here’s the Cunningham analogy: In 2003, Cunningham sold his house in Del Mar to defense contractor Mitchell Wade for $1.675 million. Cunningham had used his perch as a defense appropriator to steer contracts to Wade’s company. Wade, it appeared, had deliberately overpaid: He immediately put the house back on the market and sold it for less than $1 million.
At least Wade paid the bribes using his own money. Congress is now the briber, using tax dollars to overpay for sugar, which the government will then sell at a loss. It is “bribing” the sugar growers and ethanol producers, who, in return, are sweetening many of these lawmakers’ campaign coffers. The farm bill has a handful of sugar subsidies, all of which make life more expensive for the rest of us, but guarantee a continued flow of sugar cash for congressmen.
Sugar growers are a politically active bunch in both lobbying and campaign contributions. According to the Center for Responsive Politics, the industry has averaged more than $3 million per cycle this decade and gave to 301 House members in the 2006 last cycle. Hillary Clinton has been its top recipient this cycle, followed by Senate Agriculture Committee Chairman Tom Harkin, D-Iowa.
Sugar companies need to be this active politically because their business depends on government regulation and subsidies. The farm bill headed to the White House this week guarantees that 85 percent of all sugar sold in the U.S. will be grown domestically. That means the federal government will fiercely restrict imports from other nations, driving up the price we pay for sugar.
This continues the long-running restrictions on sugar imports, which make our sugar more expensive. In 2007, raw sugar cost $11.60 per pound in the rest of the world, but $20.99 per pound here. Of course this makes our food more expensive.
The farm bill also ramps up the special loans taxpayers give sugar growers. Sugar growers currently receive an 18-cent loan from the U.S. Department of Agriculture for each pound of raw cane sugar (and a higher rate for beet sugar) they grow. The collateral is the sugar, meaning that if a sugar company can’t sell its stuff for more than 18 cents, the government buys it. That rate would go up to 18.75 cents under the farm bill.
Finally (actually, there are other sugar subsidies in the farm bill, but too many to list), there is the seemingly Cunningham-inspired sugar-to-ethanol program: The USDA buys “excess sugar” and sells it to ethanol makers — and only ethanol makers. The first problem here is that “excess sugar” means any sugar that sugar growers want to keep off the market to further drive up prices. Second, when the USDA can sell the sugar only to ethanol makers, there’s no way the USDA will get a good price.
Buy high, sell low. That’s what Uncle Sam is doing to benefit sugar growers and ethanol makers, who in turn contribute to congressional re-elections. I wonder whether Duke Cunningham has room for 318 colleagues in his cell.
Home
Commentary


SEE THE LATEST ON THIS STORY
Comments
Vote on this comment: agree or disagree | Report as inappropriate
Vote on this comment: agree or disagree | Report as inappropriate
Vote on this comment: agree or disagree | Report as inappropriate
Vote on this comment: agree or disagree | Report as inappropriate
Vote on this comment: agree or disagree | Report as inappropriate
Vote on this comment: agree or disagree | Report as inappropriate
Vote on this comment: agree or disagree | Report as inappropriate
Vote on this comment: agree or disagree | Report as inappropriate
Vote on this comment: agree or disagree | Report as inappropriate
Vote on this comment: agree or disagree | Report as inappropriate
Vote on this comment: agree or disagree | Report as inappropriate
Vote on this comment: agree or disagree | Report as inappropriate
Vote on this comment: agree or disagree | Report as inappropriate
Vote on this comment: agree or disagree | Report as inappropriate
Vote on this comment: agree or disagree | Report as inappropriate
Vote on this comment: agree or disagree | Report as inappropriate
Vote on this comment: agree or disagree | Report as inappropriate
Vote on this comment: agree or disagree | Report as inappropriate
Vote on this comment: agree or disagree | Report as inappropriate
Vote on this comment: agree or disagree | Report as inappropriate
Vote on this comment: agree or disagree | Report as inappropriate
Vote on this comment: agree or disagree | Report as inappropriate
Vote on this comment: agree or disagree | Report as inappropriate
Vote on this comment: agree or disagree | Report as inappropriate
Vote on this comment: agree or disagree | Report as inappropriate
Vote on this comment: agree or disagree | Report as inappropriate
Vote on this comment: agree or disagree | Report as inappropriate
Vote on this comment: agree or disagree | Report as inappropriate
Vote on this comment: agree or disagree | Report as inappropriate
Vote on this comment: agree or disagree | Report as inappropriate
Vote on this comment: agree or disagree | Report as inappropriate
Vote on this comment: agree or disagree | Report as inappropriate
Vote on this comment: agree or disagree | Report as inappropriate
Vote on this comment: agree or disagree | Report as inappropriate
Vote on this comment: agree or disagree | Report as inappropriate
Vote on this comment: agree or disagree | Report as inappropriate
Vote on this comment: agree or disagree | Report as inappropriate
Vote on this comment: agree or disagree | Report as inappropriate
Vote on this comment: agree or disagree | Report as inappropriate
Vote on this comment: agree or disagree | Report as inappropriate
Vote on this comment: agree or disagree | Report as inappropriate
Vote on this comment: agree or disagree | Report as inappropriate
Vote on this comment: agree or disagree | Report as inappropriate
Vote on this comment: agree or disagree | Report as inappropriate
Vote on this comment: agree or disagree | Report as inappropriate
Vote on this comment: agree or disagree | Report as inappropriate
Vote on this comment: agree or disagree | Report as inappropriate
Vote on this comment: agree or disagree | Report as inappropriate
Vote on this comment: agree or disagree | Report as inappropriate
Vote on this comment: agree or disagree | Report as inappropriate