A review of yesterday’s sugar reform briefing with Rep. Jeff
Flake:
Yesterday the Sugar
Reform Alliance – coordinated by CEI – held a briefing on Capitol Hill to
discuss why changes were needed in the U.S. sugar program. Featuring Congressman Jeff Flake (R-AZ), a rare free-market
advocate in the House, the program was moderated by Fran Smith, adjunct fellow
at CEI, and included as speakers Kristina Rasmussen, director of government
affairs at National Taxpayers Union, and Fred Oladeinde, head of the Foundation for Democracy in Africa and
coordinator of the AGOA Civil Society Network.
Cong. Flake pointed out the public choice problem of the
sugar program – the benefits are concentrated among a small group of sugar
producers and the costs are diffuse among millions of consumers. Born and raised on a ranch in Arizona that his great-great-grandfather had started, Flake noted the problems of government control of agriculture and said that the sugar program was one of the most egregious.
Smith, who founded and coordinates SRA, focused on the
pressures for sugar reform, which are increasing, and may increase the chances
for changes through the 2007 Farm Bill. She referred to CEI’s new issue brief,
“Is the U.S. Sugar Problem Solvable?”
which gives examples of agricultural reform efforts that have worked. Smith set
out principles for reform – a main one being that sugar program changes
shouldn’t shift the cost burden from consumers to taxpayers.
Rasmussen highlighted NTU’s distribution
of Peeps candies – with the slogan “millions for sugar producers and not
one Peep for taxpayers” – to all of the Congressional offices that morning. She noted that the program acts as a hidden
tax through raising the cost of sugar two times the world price.
Focusing on the developing countries, Oladeinde pointed out
that U.S. import restrictions denied market access to poor countries that were efficient
sugar producers. In particular he noted
that such restrictions contributed to economic stagnation in several African
countries.
In a lively question and answer session dominated by
representatives of the sugar industry, proponents of the status quo for the
sugar program said that even if the U.S. prices were decontrolled, the lower costs to
manufacturers would not be passed on to consumers at the retail level. They challenged the Alliance to come up with specific alternatives to the current program, particularly if SRA participants did not
want to use buyout programs similar to those used for peanuts and tobacco.
Smith agreed that specific proposals were the next step and
noted that possible approaches would be to address the import quota systems
where low or no tariffs applied to a limited amount of sugar and where prohibitive
tariffs applied above those quota amounts. She noted that SRA participants would be interested in discussing ideas
with the industry.
--CEI Staff
