When I hear “welfare payments,” I think “poor people.”
But America’s biggest welfare recipients are often politically connected corporations—like America’s sugar producers.
The industry gets billions of dollars in special deals while deceitfully running ads that say, “American farmers don’t get subsidy checks.”
That ad confused me. If they “don’t get subsidy checks,” then what is America’s multibillion-dollar sugar program?
“It costs taxpayers nothing,” claim ads from the American Sugar Alliance. “We are a no-cost program, no cost to the taxpayer.”
“That’s absolutely bogus,” says Ross Marchand of the Taxpayers Protection Alliance in my newest video. Americans “pay as customers and they pay as taxpayers.” He’s right.
We pay several billion dollars extra every year, with “all of that money going to that handful of rich politically connected growers.”
Several companies—Amalgamated Sugar, Michigan Sugar, and Western Sugar Cooperative—get three forms of handouts:
1. Subsidies when sugar prices fall below a certain level.
2. Protection from foreign competition (a limit on imports).
3. A guarantee that prices stay high (the sugar program imposes quotas on how much sugar may be produced in America).
“These are Stalin-style price controls and supply controls,” says Marchand. “It does not help anyone.”
Well, it helps big sugar.
The price of its product is roughly doubled by these rules, so Americans pay the politically connected owners about $4 billion dollars extra.
Why does such a scam persist?
One reason it hasn’t been repealed is, well, Washington rarely repeals any handout. But also, this one costs most of us just $10 or $20 a year. We won’t go to Washington to lobby over that.
But companies that get the subsidies sure do. Creighton University economist Diana Thomas says, “Each American sugar farmer made roughly $3 million a year extra” from America’s sugar program. “Each is willing to spend a lot of time and money making sure that the law stays that way.”
Finally, Big Sugar is very good at deceiving politicians and the media.