Why Is There Corn in Your Coke?

Even in a season characterized by candy canes and cookies waiting for Santa, protectionism, specifically the U.S. sugar program, hurts American consumers and workers. The U.S. sugar program provides a classic example of a special interest group benefiting from political connections, to the detriment of American consumers.

The Cost of Sugar Subsidies

The present sugar program, created by the 1981 Farm Bill, consists of a domestic commodity loan program that sets a support price (loan rate) for sugar and establishes an import quota system that restricts foreign competition and ensures a high domestic price for sugar. Instead of a more stable sugar economy, the result is higher prices for everything that contains sugar.

A recent study conducted by the General Accounting Office (GAO) demonstrated that the sugar program costs consumers at least $1.9 billion annually in higher costs for their personal purchases of sugar and products containing sugar. According to GAO, the sugar program also another $90 million annually in taxpayer dollars because of higher prices for sugar and sugar-containing products purchased for the federal government’s feeding programs.

The program has also virtually destroyed the domestic sugarcane refining industry. Since the program was enacted in 1981, 12 of the industry’s 22 refineries have closed. The industry has lost over 40 percent of its former capacity, and thousands of Americans have lost their jobs.

Sugar Program