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Cost of the U.S. Sugar Program Revisited, The

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Using a multimarket model of U.S. sweeteners, the authors revisit the cost of the U.S. sugar program by analyzing the welfare implications of its removal. Their approach addresses the industrial organization of food industries that use sweeteners and treats the United States as a large importer. The authors estimate that, with the removal of the U.S. sugar program, cane growers, sugar beet growers, and beet processors would lose, respectively, $307 million, $650 million, and $89 million. Sweetener users would gain $1.9 billion. The deadweight loss of the current sugar program would be $532 million (all estimates are based on 1999 prices). World prices would increase by 13.2 percent with the removal of the program.

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Paper provided by Center for Agricultural and Rural Development (CARD) at Iowa State University in its series Center for Agricultural and Rural Development (CARD) Publications with number 01-wp273.

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Date of creation: Mar 2001
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Handle: RePEc:ias:cpaper:01-wp273

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  1. 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, Western Agricultural Economics Association, vol. 18(01), July.
  2. Catherine J. Morrison, 1990. "Market Power, Economic Profitability and Productivity Growth Measurement: An Integrated Structural Approach," NBER Working Papers 3355, National Bureau of Economic Research, Inc.
  3. Moschini, GianCarlo & Mehrkens, Joseph, 1991. "Economic Issues in Tariffication: An Overview," Staff General Research Papers, Iowa State University, Department of Economics 12751, Iowa State University, Department of Economics.
  4. Devadoss, Stephen & Kropf, Jurgen & Wahl, Thomas I., 1995. "Trade Creation And Diversion Effects Of The North American Free Trade Agreement Of U.S. Sugar Imports From Mexico," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, Western Agricultural Economics Association, vol. 20(02), December.
  5. 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, Center for Agricultural and Rural Development (CARD) at Iowa State University 01-bp32, Center for Agricultural and Rural Development (CARD) at Iowa State University.
  6. Haley, Stephen L., 1998. "Modeling The U.S. Sweetener Sector: An Application To The Analysis Of Policy Reform," Working Papers, International Agricultural Trade Research Consortium 14610, International Agricultural Trade Research Consortium.
  7. Poonyth, Daneswar & Westhoff, Patrick & Womack, Abner & Adams, Gary, 2000. "Impacts of WTO restrictions on subsidized EU sugar exports," Agricultural Economics, Blackwell, Blackwell, vol. 22(3), pages 233-245, April.
  8. Gardner Bruce, 2007. "Fuel Ethanol Subsidies and Farm Price Support," Journal of Agricultural & Food Industrial Organization, De Gruyter, De Gruyter, vol. 5(2), pages 1-22, December.
  9. Sanjib Bhuyan & Rigoberto A. Lopez, 1997. "Oligopoly Power in the Food and Tobacco Industries," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, Agricultural and Applied Economics Association, vol. 79(3), pages 1035-1043.
  10. S. McCorriston & C. W. Morgan & A. J. Rayner, 1998. "Processing Technology, Market Power and Price Transmission," Journal of Agricultural Economics, Wiley Blackwell, Wiley Blackwell, vol. 49(2), pages 185-201.
  11. Poonyth, Daneswar & Westhoff, Patrick & Womack, Abner & Adams, Gary, 2000. "Impacts of WTO restrictions on subsidized EU sugar exports," Agricultural Economics: The Journal of the International Association of Agricultural Economists, International Association of Agricultural Economists, International Association of Agricultural Economists, vol. 22(3), April.
  12. Sumner, Daniel A., 2000. "Domestic support and the WTO negotiations," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, Australian Agricultural and Resource Economics Society, vol. 44(3), September.
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Cited by:
  1. Fang, Cheng & Beghin, John C., 2001. "Urban Demand for Edible Oils and Fats in China. Evidence from Household Survey Data," 2001 Conference (45th), January 23-25, 2001, Adelaide, Australian Agricultural and Resource Economics Society 125620, Australian Agricultural and Resource Economics Society.
  2. Beghin, John C. & Jensen, Helen H., 2008. "Farm Policies and Added Sugars in US Diets," Staff General Research Papers, Iowa State University, Department of Economics 12872, Iowa State University, Department of Economics.
  3. Fadiga, Mohamadou L. & Mohanty, Samarendu & Pan, Suwen & Welch, Mark, 2006. "U.S. Proposal for WTO Hong Kong Ministerial Conference: What's at Stake for Cotton Producers?," 2006 Annual meeting, July 23-26, Long Beach, CA, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) 21273, 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," Center for Agricultural and Rural Development (CARD) Publications, Center for Agricultural and Rural Development (CARD) at Iowa State University 06-wp424, Center for Agricultural and Rural Development (CARD) at Iowa State University.

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