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James M. Pralle, Horace, N.D. , Published May 19 2012

Sugar, oil ethanol: same story

I’ve been a conspiracy theorist the better part of my life. As a teenager, I watched professional wrestling; as an adult, I’ve become fascinated with politics and public policy.

But as of Tuesday’s (May 8) Forum article “Critics, supporters agree sugar protections safe,” detailing the current sugar policy, I can put my paranoia to rest. The “fix” really is in.

There can be no doubt that money, by way of campaign contributions or any reasonable facsimile, can and will buy bad policy. During the first quarter of 2012, the sugar industry spent $2.5 million persuading (lobbying) Congress regarding sugar policy. This amounts to almost six times what opponents of the sugar policy spent.

Despite the fact that the current policy will cost U.S. consumers an additional $2 billion to $3 billion annually in higher prices, the current sugar policy has already, or is expected to get, a pass on all counts, thereby governing sugar policy, among others, for five more years. This represents an additional $10 billion to $15 billion spent needlessly for the sake of comparatively few in the sugar industry.

Of those dollars spent lobbying, I’d suggest that the bulk of the dollars are not spent on research, mailings and manpower but rather contributions made directly or indirectly to the campaign coffers of those ultimately responsible for making the “right” decision.

I guess I can take solace in the fact that it’s not really a federally funded subsidy, like so many others, but instead is more like a Roth IRA. It gets funded after taxes on our incomes have already been paid.

This isn’t a shot at American Crystal Sugar. It’s a shot at the system in general. We’re not living in an “of the people, by the people, for the people” world any longer. The current political landscape and our policy-driven society is focused like a laser on an every-man-for-himself mentality. If it’s not sugar, it’s oil; if it’s not oil, it’s ethanol; if it’s not ethanol, it’s subsidies in general.

Subsidies are a large part of what’s wrong with this country and why we have suffered and will continue to suffer the economical and budgetary dire straits of the past and, undoubtedly, the future.

The bigger question is: Why do we put up with it? Politicians will have us believe that this policy, specifically, guarantees jobs and stable commodity prices. While this is the boilerplate rationale of subsidies in general, it’s a load of crap – and a large load at that. Commodity prices are anything but stable. Almost without exception, and with or without subsidies, commodity markets fluctuate according to the laws of supply and demand – and they should be allowed to do so.

This policy, however, virtually assures profits for the U.S. sugar industry through price controls, tariffs on foreign sugar and loan guarantees. While guaranteeing the sugar industry profits, we consumers are guaranteed to pay more than we should. This sounds a little one-sided to me. The last time I checked, any profit from any endeavor, while desired, was optional.