Oh Sugar!

Oh Sugar!

Alexis ChapmanTuesday,3 November 2015

It’s kind of too bad that Jeb Bush blew it in last Wednesday’s debate because right before he did that he almost had a really good idea. Earlier in the week Bush’s office announced that he was calling for an end to sugar subsidies. This is in keeping with his campaign message to “end crony capitalism,” and it sounds like a good idea for the Federal Government to not support products that contribute to hundreds of thousands of American deaths each year. But as with anything in politics, it’s a little more complicated, and a little more awful than that.

As Simon Cameron famously said “An honest politician is one who, when he is bought, will stay bought.” By that measure Jeb Bush is not a very honest politician. His presidential campaign has received over $500,000 in donations from sugar industry groups. Oops. This probably seemed like a wise purchase on the part of the industry. As Governor of Florida, the country’s largest producer of sugar cane, Bush was considered a sugar ally and doesn’t seem to have ever mentioned wanting to end the subsidies while in office. But a presidential campaign cannot live by sugar industry contributions alone. In order to win the nomination, and the election, Bush would probably need to carry Iowa, and getting support in Iowa means getting support from the corn lobby.

Agricultural groups rarely fight each other on legislation and the corn and sugar industries have previously been united by their claims that sugar (of any kind) doesn’t cause obesity. But that changed earlier this year when the corn industry began lashing out and lobbying for reduced support for sugar. So if you’re a political cynic (and if you’re reading this I’m assuming you are) it could easily be interpreted that Bush is bailing on sugar to win favor with corn. But wait, you might be wondering, isn’t corn also used to make sugar, and doesn’t corn also receive subsidies, and couldn’t that also be seen as crony capitalism?

Indeed. Sugar subsidies exist for cane and beet sugar. It’s a complex system of loans and tariffs but basically the government lets producers (not growers) borrow money cheaply and also prevents the U.S. market from being flooded with super cheap imported sugar. This keeps U.S. prices for sugar above the world market rate, making sugar more expensive in the U.S. than it is elsewhere. Because the loans have to be paid back at the end of each year it, theoretically, doesn’t cost taxpayers anything. This system has been largely unchanged for decades due to wide spread political support in cane and beet sugar producing states.

Corn subsidies on the other hand were cut under the 2014 Farm Bill, which eliminated direct payments to corn growers and replaced it with Price Loss Coverage and other programs. Corn subsidies in this country have a history going back to the Great Depression and both the old and new systems are at least as complicated as the sugar program, but even with the 2014 changes we’re still spending millions upon millions of taxpayer dollars keeping corn cheap and only a fraction of it will be consumed by humans as anything resembling actual corn. Around 40% of the corn we grow will get turned into ethanol, over 30% will become animal feed, and of what’s left a bunch will become corn syrup and be put into sodas and other tasty treats that are slowly killing us all. So while the sugar subsidy program drives prices of sugar up, corn subsidies bring the price of corn, and by extension corn sugar, down. This is the reason that many products which originally used sugar, like candy and soda, have switched to corn sugar. And also part of the reason a lot of these products are so cheap.

To recap, the Federal Government is using tax dollars to jack up the price of one type of sugar and lower the price of another because that’s what’s best for two industries that currently have a lot of power in DC. That’s crony capitalism. Meanwhile, some state and local governments are looking to levy extra taxes on soda and similar items in order to make them more expensive and hopefully address some of the health problems associated with overconsumption of sugar (whatever kind it is). That is wildly inefficient and illogical government.

If Jeb Bush, or any politician, actually wanted to change the system, maybe they could become un-bought long enough to initiate a process to re-evaluate all subsidies, not just sugar. They could demand that nutrition and public health be considered as a factor when determining agricultural subsidies, and they could do something to address the issue of campaign financing that fuels this whole debacle. Once we’ve done that maybe we could redirect a bunch of money that we’re currently spending on multiple types of crony capitalist sugar and instead use it to subsidize something like broccoli or spinach, or we could use it to expand SNAP and WIC, or we could spend it on the Food Safety Modernization Act of 2010, sweeping reforms to our food safety system that aim to prevent contamination rather than just contain it. The act was passed in 2011, the final rules came out last week, and as of right now there is basically zero money budgeted to implement or enforce it. If they ever do get around to enforcing it I hope they check the nation’s sugar crops; they seem to be contaminated with money and politicians.

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Image Credit: Gage Skidmore on Flickr

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