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The Cost of the U.S. Sugar Program Revisited

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

We analyze the welfare cost of the U.S. sugar program, using a multimarket model of U.S. sweetener markets, which includes raw crops, sugar extraction and refining, and sweetener users (food-processing industries and final consumers). We address the industrial organization of food industries using sweeteners and treat the United States as a large importer. With the removal of the program, cane growers, sugar beet growers and processors would lose $307, $650, and $89 million (1999 prices), respectively; sweetener users would gain $1.9 billion; World prices would increase by 13.2 percent. The deadweight loss of the program is estimated at $532 million.

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File URL: http://purl.umn.edu/125058
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Paper provided by Australian Agricultural and Resource Economics Society in its series 2002 Conference (46th), February 13-15, 2002, Canberra with number 125058.

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Date of creation: Feb 2002
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Handle: RePEc:ags:aare02:125058
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  1. 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.
  2. 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.
  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. 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.
  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. 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.
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