Have you noticed grocery prices rising? Here's one way to reduce them — a little, anyway.
Sen. Richard Lugar, R-Ind., proposes to end all quotas, regulations and tariffs that give a few companies a form of sugar high, but cost consumers and businesses billions in higher prices.
His Senate Bill 685 is called the Free Sugar Act of 2011. It is supported by the National Taxpayers Union, Citizens Against Government Waste, the Competitive Enterprise Institute and other consumer-oriented groups, as well as by food companies and organizations.
"This is a classic example of big government that so many Americans are angry about today," Mark Helmke, Sen. Lugar's spokesman, told us. "It's a hidden, special tax on the consumer or anybody who processes foods. It's a jobs-killing measure."
The sugar support programs are a legacy of the New Deal socialist schemes of the 1930s.
According to a study by Mark Perry, an economist at the University of Michigan-Flint School of Management, "American consumers and sugar-using businesses paid an additional 25.4 cents per pound ... over the world price" in 2010. He calculated that the 17.5 billion pounds of domestically produced sugar meant $4.5 billion in higher sugar costs for U.S. consumers. Historically, according to Mr. Perry, Americans since 1982 have paid double the world sugar price.
The global price of sugar also has more than quadrupled from the 5 cents a pound in 2002 to 22.8 cents as of April 18. So sugar consumers are getting a doubly sour taste from inflation and the sugar schemes.
The sugar industry maintains that the price supports and import quotas are necessary because foreign companies "dump" excess sugar on the market, thus artificially lowering prices and damaging U.S. sugar growers; and that imported sugar's quality isn't as high as domestic sugar. With prices so high, the dumping argument doesn't hold up. And U.S. import quality standards, which have proven adequate for other imported agricultural products, would work fine for sugar.
Sen. Lugar has been trying to restore a free market in sugar since he came to Congress in 1977. "This seems to be one of those issues that lingers on," Mr. Helmke said. "But hopefully we'll wear it down."