Sugar Program: Impact on Sweetener Users and Producers

GAO discussed the impact of: (1) the U.S. sugar program on sweetener users and producers; and (2) domestic and international conditions on the sugar program's operations. GAO noted that: (1) the sugar program's price support loans and tariff-rate import quotas protect domestic producers from lower world prices, costing sweetener users about $1.4 billion annually; (2) sugar program benefits are concentrated among a relatively small percentage of farms; (3) high domestic sugar prices allow manufacturers of high fructose corn syrup, sugar's main competitor, to keep their prices high; (4) the Department of Agriculture (USDA) has imposed legislatively mandated limits on the amount of domestic sugar that producers can sell; (5) USDA has also assigned marketing allocations to beet and cane sugar based on past marketings, processing and refining capacity, and the ability to market sugar; and (6) recent international trade agreements will have little impact on U.S. sugar prices and the U.S. sugar market.