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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 revisit the cost of the U.S. sugar program by analyzing the welfare implications of its removal. We use a multimarket model of U.S. sweetener markets, which includes raw crops, sugar extraction and refining, high-fructose corn syrup, and sweetener users (food-processing industries and final consumers). Our approach addresses the industrial organization of food industries using sweeteners and treats the United States as a large importer. We estimate that, with the removal of the program, cane growers, sugar beet growers, and beet processors would lose $307 million, $650 million, and $89 million (1999 prices), respectively. Sweetener users would gain $1.9 billion (1999 prices). The deadweight loss of the current sugar program is estimated at $532 million (1999 prices). World prices would increase by 13.2 percent with the removal of the program.

Suggested Citation

  • Beghin, John C. & El Osta, Barbara & Cherlow, Jay R. & Mohanty, Samarendu, 2001. "The Cost of the U.S. Sugar Program Revisited," Hebrew University of Jerusalem Archive 18431, Hebrew University of Jerusalem.
    • Handle: RePEc:ags:hebarc:18431
    DOI: 10.22004/ag.econ.18431
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