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The Cost of the U.S. Sugar Program Revisited

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

Abstract

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.

Suggested Citation

  • Beghin, John C. & El Osta, Barbara & Cherlow, Jay R. & Mohanty, Samarendu, 2002. "The Cost of the U.S. Sugar Program Revisited," 2002 Conference (46th), February 13-15, 2002, Canberra 125058, Australian Agricultural and Resource Economics Society.
  • Handle: RePEc:ags:aare02:125058
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    References listed on IDEAS

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    1. Devadoss, Stephen & Kropf, Jurgen, 1996. "Impacts of trade liberalizations under the Uruguay round on the world sugar market," Agricultural Economics, Blackwell, vol. 15(2), pages 83-96, November.
    2. 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.
    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. 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.
    5. 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.
    6. Poonyth, Daneswar & Westhoff, Patrick & Womack, Abner & Adams, Gary M., 2000. "Impacts of WTO restrictions on subsidized EU sugar exports," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 22(3), April.
    7. 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.
    8. 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.
    9. 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.
    10. Devadoss, Stephen & Kropf, Jurgen, 1996. "Impacts of trade liberalizations under the Uruguay Round on the world sugar market," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 15(2), November.
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    Citations

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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. John C. Beghin & Amani Elobeid, 2015. "The Impact of the U.S. Sugar Program Redux," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 37(1), pages 1-33.
    3. Amani Elobeid & John Beghin, 2006. "Multilateral Trade and Agricultural Policy Reforms in Sugar Markets," Journal of Agricultural Economics, Wiley Blackwell, vol. 57(1), pages 23-48, March.
    4. Fang, Cheng & Beghin, John C., 2002. "Urban Demand for Edible Oils and Fats in China: Evidence from Household Survey Data," Journal of Comparative Economics, Elsevier, vol. 30(4), pages 732-753, December.
    5. repec:wsi:ccexxx:v:03:y:2012:i:03:n:s2010007812500145 is not listed on IDEAS
    6. Bonnet, CĂ©line & Requillart, Vincent, 2010. "Is The Eu Sugar Policy Reform Likely To Increase Obesity?," 115th Joint EAAE/AAEA Seminar, September 15-17, 2010, Freising-Weihenstephan, Germany 116414, European Association of Agricultural Economists;Agricultural and Applied Economics Association.
    7. Schmitz, Troy G. & Lewis, Karen E., 2015. "Impact of NAFTA on U.S. and Mexican Sugar Markets," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 40(3), August.
    8. Beghin, John C. & Jensen, Helen H., 2008. "Farm policies and added sugars in US diets," Food Policy, Elsevier, vol. 33(6), pages 480-488, December.
    9. Whistance, Jarrett & Payen, Andrick & Thompson, Wyatt, 2015. "Suspension Agreements and Antidumping/Countervailing Duties: US-Mexico Sugar Markets and the Effects of Alternative Trade Policies," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205550, Agricultural and Applied Economics Association;Western Agricultural Economics Association.
    10. Gotor, Elisabetta & Tsigas, Marinos E., 2011. "The impact of the EU sugar trade reform on poor households in developing countries: A general equilibrium analysis," Journal of Policy Modeling, Elsevier, vol. 33(4), pages 568-582, July.
    11. Elobeid, Amani & Beghin, John C., 2005. "Multilateral Trade and Agricultural Policy Reforms in Sugar Markets (Revised)," Staff General Research Papers Archive 12419, Iowa State University, Department of Economics.

    More about this item

    Keywords

    Agribusiness; Public Economics; Q18; Q17; F13.;

    JEL classification:

    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade

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