Tuesday, January 31, 2012

Dancing To The Beets

Generally, whenever we hear of lobbyists and the special interest groups they represent, we think of Wall Street, banks, insurance companies, pharmaceutical companies, and oil and gas companies. Farmers don't usually come to mind, but it turns out that sugar beet farmers are one of the most successful groups at lobbying Congress and have been for quite some time.

From the Minneapolis Star Tribute:

With roughly 500,000 acres of sugar beets planted across Minnesota and North Dakota, American Crystal Sugar is the nation's largest producer of refined sugar through beet farming. It generates 15 percent of the country's sugar supply.

But much of the cooperative's financial success is cultivated in Washington D.C.

American Crystal Sugar has become one of the country's most powerful lobbying groups, doling out cash contributions to lawmakers at levels approaching big-business groups like the American Bankers Association. And it's all for a single objective: To guarantee tariffs and price supports allow sugar beet farmers to make money, even if it drives the cost of sugar above the global market.

"They're considered one of the strongest lobbies there is," said Larry Graham, president of the National Confectioners Association, a candy-makers group which has fought in vain against the sugar program.

Price supports for beet sugar inflate sugar prices for food makers and restaurants, costs the food industry often passes on to consumers in everything from candy and cakes to cereal and soda pop. Some economists estimate that Americans pay at least $1 billion more for sugar a year than they would in an open market. ...

The sugar industry and its supporters, though, say the sugar program -- unlike most farm subsidies -- involves no government payments and keeps consumer prices stable. "It's a stable industry, and that's what's needed in this country, something stable," Rutherford said.

Yes, stability is nice, but at what cost? Even assuming the candy makers have their own ax to grind and have inflated the cost somewhat, there's a lot of money flowing out of American's pockets paying for the tariffs and price supports. That certainly seems to belie the holy mantra of the "Free Market."

And while I don't begrudge farmers being able to make money for their efforts, I do wonder about some of the side effects of their lobbying efforts:

To protect sugar subsidies, American Crystal's political arm gave $1.16 million to 177 House and Senate candidates in 2011, and spent more than $1 million for lobbying. ...

American Crystal Sugar is especially generous with members of the House Agriculture Committee, which plays a key role in food policy and the five-year farm bills that set out subsidies. In 2011, the cooperative contributed to 37 of the committee's 46 members. More than half of the committee, including chairman Frank Lucas, R-Okla., and Peterson, the ranking minority member, received $10,000, the maximum donation allowed in an election cycle.
[Emphasis added]

That's a lot of sweetener flowing in the process, and we're paying for it.



Blogger Charles said...

Don't forget the Fanjuls

10:06 PM  
Anonymous Marcellina said...

I assume they lobby hard to be able to compete with the cane sugar manufacturers?

12:03 AM  

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