A photo taken on December 3, 2014 shows sugar cubes at the Crystal Union Group refinery in Bazancourt, near the eastern city of Reims.
Francois Nascimbeni/AFP/Getty

Why sugar matters so much in the 2016 race

It was a subtle shot between two leading presidential candidates, which most of the audience probably missed. In last night’s debate for the Republican presidential candidates, largely out of the blue, Ted Cruz boasted about the costly federal programs he’s eager to eliminate.
“Among them are corporate welfare, like sugar subsidies. Let’s take that as an example. Sugar subsidies. Sugar farmers farm under roughly 0.2% of the farmland in America, and yet they give 40% of the lobbying money.
 
“That sort of corporate welfare is why we’re bankrupting our kids, and grandkids. I would end those subsidies to pay for defending this nation.”
Cruz didn’t mention any specific names, but it was a hint of a intra-party fight that’s on the horizon.
 
In this case, Cruz and Jeb Bush are ready to phase out federal sugar subsidies, which many economic conservatives – and liberals, for that matter – see as “crony capitalism.”
 
But Big Sugar still has one key ally.
 
The Washington Examiner reported in August:
Battling crony capitalism and corporate welfare has been a central theme of this weekend’s [gathering sponsored by the Koch brothers]. In that vein, Mike Allen of Politico asked Marco Rubio at Sunday’s lunch, commented on Rubio’s votes against a federal backstop for terrorism risk insurance and the Export-Import Bank, and then noted that Rubio made one exception to his opposition to crony capitalism. Rubio instantly knew what Allen was talking about: the federal sugar program.
 
Rubio has consistently voted for and defended the federal sugar program, which drives U.S. sugar prices higher by keeping out foreign sugar and provides federal loans to guarantee those high prices.
The Florida senator has gone so far as to make a national security argument about sugar subsidies, which even National Review mocked as ridiculous.
 
The editorial board of the Wall Street Journal added last week:
There is no economic defense of the sugar program, which every year provides nonrecourse loans to sugar processors at a guaranteed price-per-pound. If the market price is below the guarantee when they want to sell, the processors simply dump the crop on the U.S. Department of Agriculture as the loan repayment. To avoid that outcome, the USDA holds sugar prices artificially high by imposing tariffs on imports above an annual quota. The result is that Americans pay about twice what the rest of the world pays for sugar.
 
The Coalition for Sugar Reform, which includes businesses that use sugar, says that for every U.S. sugar-growing job saved from high U.S. sugar prices, about three American manufacturing jobs are lost. The U.S. candy industry has been hollowed out as companies have fled to places like Guatemala and Thailand where they can remain competitive by buying sugar at world-market prices.
 
Mr. Rubio explains his support with the last refuge of protectionist scoundrels – national security. […] Mr. Rubio has many talents, but one trait the presidential campaign has exposed is a tendency to hedge on his principles when he thinks it’s politically beneficial…. His sugar high is another low.
Get the feeling Cruz sees a key Rubio vulnerability here? I sure do.
 
 

Agriculture, Debates, Jeb Bush, Marco Rubio and Ted Cruz

Why sugar matters so much in the 2016 race