Sugar Program

Impact on Sweetener Users and Producers Gao ID: T-RCED-95-204 May 24, 1995

The U.S. sugar program, through its price support loans and tariff-rate import quotas, protects sugar producers from lower world prices but boosts domestic sugar prices, costing users an estimated $1.4 billion annually. Benefits are concentrated among a relatively small percentage of sugarcane and sugar beet farms, and there is no limit to the size of an individual's benefits. GAO estimates that 42 percent of the sugar growers' benefits went to one percent of all sugar farms in 1991. GAO recommends that Congress consider legislation to move the industry toward a more open market. GAO suggests that, as part of this transition, Congress gradually lower the loan rate for sugar and direct the Agriculture Department to adjust import quotas accordingly. Reducing the loan rate gradually would give producers time to make orderly adjustments.



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