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

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

Abstract

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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Bibliographic Info

Paper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number 1947.

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Date of creation: 01 Jan 2003
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Publication status: Published in Contemporary Economic Policy 2003, vol. 21 no. 1, pp. 106-16
Handle: RePEc:isu:genres:1947

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Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070
Phone: +1 515.294.6741
Fax: +1 515.294.0221
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Web page: http://www.econ.iastate.edu
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References

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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, vol. 18(01), July.
  2. GianCarlo Moschini, 1991. "Economic Issues in Tariffication: An Overview," Food and Agricultural Policy Research Institute (FAPRI) Publications 90-gatt1, Food and Agricultural Policy Research Institute (FAPRI) at Iowa State University.
  3. 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.
  4. 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.
  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.
  6. 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.
  7. 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.
  8. 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.
  9. 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.
  10. 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, vol. 22(3), April.
  11. 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.
  12. 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.
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Cited by:
  1. John C. Beghin & Helen H. Jensen, 2008. "Farm Policies and Added Sugars in US Diets," Center for Agricultural and Rural Development (CARD) Publications 08-wp462, 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. 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.
  4. 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).

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