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The Cost Of The U.S. Sugar Program Revisited

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  • John C. Beghin
  • Barbara El Osta
  • Jay R. Cherlow
  • Samarendu Mohanty

Abstract

The article analyzes the welfare cost of the U.S. sugar program using a multimarket model of U.S. sweetener markets. The latter includes raw crops, sugar extraction and refining, and sweetener users (food-processing industries and final consumers). The authors address the industrial organization of food industries using sweeteners and treat the United States as a large importer. With the removal of the program, this article estimates (all figures in 1999 dollars) that in 1998 cane growers, sugar beet growers, and processors would have lost $307, $650, and $89 million, respectively; sweetener users would have gained $1.9 billion. World prices would have increased by 13.2%. The deadweight loss of the program is estimated at $532 million. Copyright 2003 Western Economic Association International.

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Bibliographic Info

Article provided by Western Economic Association International in its journal Contemporary Economic Policy.

Volume (Year): 21 (2003)
Issue (Month): 1 (01)
Pages: 106-116

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Handle: RePEc:bla:coecpo:v:21:y:2003:i:1:p:106-116

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References

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  1. Chad E. Hart & Bruce A. Babcock, 2001. "Implications of the WTO on the Redesign of U.S. Farm Policy," Center for Agricultural and Rural Development (CARD) Publications 01-bp32, Center for Agricultural and Rural Development (CARD) at Iowa State University.
  2. Sanjib Bhuyan & Rigoberto A. Lopez, 1997. "Oligopoly Power in the Food and Tobacco Industries," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(3), pages 1035-1043.
  3. Rendleman, C. Matthew & Hertel, Thomas W., 1993. "Do Corn Farmers Have Too Much Faith In The Sugar Program?," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 18(01), July.
  4. Haley, Stephen L., 1998. "Modeling The U.S. Sweetener Sector: An Application To The Analysis Of Policy Reform," Working Papers 14610, International Agricultural Trade Research Consortium.
  5. S. McCorriston & C. W. Morgan & A. J. Rayner, 1998. "Processing Technology, Market Power and Price Transmission," Journal of Agricultural Economics, Wiley Blackwell, vol. 49(2), pages 185-201.
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Cited by:
  1. John C. Beghin & Amani Elobeid, 2013. "The Impact of the U.S. Sugar Program Redux," Center for Agricultural and Rural Development (CARD) Publications 13-wp538, Center for Agricultural and Rural Development (CARD) at Iowa State University.
  2. Cheng Fang & John C. Beghin, 2000. "Urban Demand for Edible Oils and Fats in China: Evidence from Household Survey Data," Food and Agricultural Policy Research Institute (FAPRI) Publications 00-wp245, Food and Agricultural Policy Research Institute (FAPRI) at Iowa State University.
  3. Elobeid, Amani E. & Beghin, John C., 2004. "Multilateral Trade and Agricultural Policy Reforms in Sugar Markets," 2004 Annual meeting, August 1-4, Denver, CO 20045, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  4. David Abler & John C. Beghin & David Blandford & Amani Elobeid, 2006. "U.S. Sugar Policy Options and Their Consequences under NAFTA and Doha," Food and Agricultural Policy Research Institute (FAPRI) Publications 06-wp424, Food and Agricultural Policy Research Institute (FAPRI) at Iowa State University.
  5. Beghin, John C. & Jensen, Helen H., 2008. "Farm Policies and Added Sugars in US Diets," Staff General Research Papers 12872, Iowa State University, Department of Economics.
  6. Bonnet, Celine & Requillart, Vincent, 2010. "Is The Eu Sugar Policy Reform Likely To Increase Obesity?," 115th Joint EAAE/AAEA Seminar, September 15-17, 2010, Freising-Weihenstephan, Germany 116414, European Association of Agricultural Economists.
  7. Gotor, Elisabetta & Tsigas, Marinos E., 2011. "The impact of the EU sugar trade reform on poor households in developing countries: A general equilibrium analysis," Journal of Policy Modeling, Elsevier, vol. 33(4), pages 568-582, July.
  8. Elobeid, Amani & Beghin, John C., 2005. "Multilateral Trade and Agricultural Policy Reforms in Sugar Markets (Revised)," Staff General Research Papers 12419, Iowa State University, Department of Economics.

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