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