Monthly Archives: January 2011

Sugar Free

Tuesday morning Rep. Collin Peterson (MN-7) was interviewed on MPR.  Cathy Wurzer asked about being the ranking minority member of the House Agriculture Committee instead of its chair.   A few of his comments had me wide awake in no time.

MPR Peterson interview 012511
(the audio begins immediately at this topic)

“When I was chairman, sugar never came up.  I just put it together and it went into the bill.  I think that will be what happens this time… Everybody knows I’m the guy that’s got the most sugar in my area.  They’re not going to give me a hard time.”

I heard a lot of arrogance in these remarks, but it was the next sentence that had me yelling back:

“And it doesn’t cost any money.”

Really?

Unfortunately, this audio link lacks context – what was the question he was asked?  If Rep. Peterson means that there’s no cost to the process of simply writing up what he wants and inserting into a bill, then yes, I agree with that.  But this interview immediately followed a story on the influence of Moorhead-based American Crystal Sugar’s political contributions.  That story cited information from opensecrets.org that ACS-PAC gave to 32 senators and 218 congresspeople during the last election cycle. As the story’s author said,

“That money opens doors for Price [lobbyist for ACS] on Capitol Hill.”

Too bad Monty Hall isn’t here to tell us what’s behind those doors.  I guess I’ll have to look for myself…

Rep. Jim Jordan (R-OH) wants to end a cornucopia of federal programs and subsidies, including the USDA Sugar Program, which rings in at $14 million ANNUALLY.  Sounds like it’s not exactly  “doesn’t cost any money”…

It is true that sugar producers don’t receive direct government subsidies.  Does that mean there’s no payout behind those doors on Capitol Hill?  No – the payout is in tariffs and quotas that diminish supply.  Since the demand for sugar doesn’t decrease, US consumers end up with higher prices.

The USDA Sugar Program has quotas and charges tariffs on incoming sugars from certain areas; the mind-boggling rate chart can be found here.  Just imagine the bureaucratic and administrative efforts from public and private offices to enforce and conform to these tariff schedules!

Those tariffs and quotas restrict competition so there are higher prices in the United States.  Mark Perry, an economist with the University of Michigan and currently at the American Enterprise Institute, estimates that US consumers overpaid $4.5 BILLION in 2010 than if they had been able to pay the world market price for sugar.

In this case, the federal government is a catalyst for costs to taxpayers, but not a direct participant since they aren’t doling out tax dollars as a subsidy.  I guess I understand why in the eyes of Rep. Peterson he doesn’t see any “cost” to the taxpayer.   Let’s do some quick math: $4.5Bn divided by about 310 million Americans.. about $14.50 from each one of us last year.  Since sugar is in almost everything we eat, who could possibly notice paying about 4 cents a day more for their food?  But it sure adds up when we all do it!

Government regulations and mandates create small, indirect and sometimes invisible costs from all of us to benefit a select few.   Sugar is only one example of the hidden costs due to government interference in markets.  It all leaves a bad taste in my mouth and reminds us of the need to limit the power of the federal government.