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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 Food and Agricultural Policy Research Institute (FAPRI) at Iowa State University in its series Food and Agricultural Policy Research Institute (FAPRI) Publications with number 01-wp273.

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

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  1. 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.
  2. Sumner, Daniel A., 2000. "Domestic support and the WTO negotiations," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 44(3), September.
  3. Chad E. Hart & Bruce A. Babcock, 2001. "Implications of the WTO on the Redesign of U.S. Farm Policy," Food and Agricultural Policy Research Institute (FAPRI) Publications 01-bp32, Food and Agricultural Policy Research Institute (FAPRI) at Iowa State University.
  4. Poonyth, Daneswar & Westhoff, Patrick & Womack, Abner & Adams, Gary, 2000. "Impacts of WTO restrictions on subsidized EU sugar exports," Agricultural Economics, Blackwell, vol. 22(3), pages 233-245, April.
  5. 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.
  6. 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.
  7. Moschini, Giancarlo, 1991. "Economic issues in tariffication: an overview," Agricultural Economics, Blackwell, vol. 5(2), pages 101-120, June.
  8. 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, vol. 20(02), December.
  9. 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.
  10. 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.
  11. Gardner Bruce, 2007. "Fuel Ethanol Subsidies and Farm Price Support," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 5(2), pages 1-22, December.
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Cited by:
  1. 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.
  2. 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.
  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 21273, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  4. Cheng Fang & John C. Beghin, 2000. "Urban Demand for Edible Oils and Fats in China: Evidence from Household Survey Data," Center for Agricultural and Rural Development (CARD) Publications 00-wp245, Center for Agricultural and Rural Development (CARD) at Iowa State University.

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