August 19, 2009 2:49PM

Obama Administration Sides With Special Interests and Status Quo on Sugar Imports

By Daniel Griswold

Pardon me while I pile on the post earlier today by my colleague Sallie James about the Obama administration refusing to allow more sugar to be imported to the United States. The U.S. Department of Agriculture this week declined to relax the quotas the federal government imposes on imported sugar despite soaring domestic prices and understandable complaints from U.S. confectioners and other sugar‐​consuming businesses about potential shortages.


For all his talk about change, President Barack Obama has shown no inclination to pursue meaningful reform of U.S. agricultural programs. He supported the subsidy‐​laden and protectionist farm bill that finally passed Congress in 2008. On the eve of the U.S. presidential election in October 2008, he wrote a letter to the U.S. sugar industry reminding growers that they were one special interest that had nothing to fear from an Obama administration.


In his letter, he offered the sugar lobby this assurance:

With respect to the sugar program specifically, while it’s true I have had concerns about the program, I will commit to listening and working with you in the future to ensure that we have a safety net that works for all of agriculture.

He then went on to criticize his opponent John McCain for opposing the farm bill and voting consistently against the sugar program (or, as Obama put it, “against sugar growers”).


In my new Cato book, Mad about Trade: Why Main Street America Should Embrace Globalization, I call the sugar program “the poster boy for self‐​damaging protectionism.” As I write in the book,

When the program is not raising prices for consumers at the store, it is savaging the bottom line for American companies. Artificially high domestic sugar prices raise the cost of production for refined sugar, candy and other confectionary products, chocolate and cocoa products, chewing gum, bread and other bakery products, cookies and crackers, and frozen bakery goods. Higher costs cut into profits and competitiveness, putting thousands of jobs in jeopardy.

If the president is looking for good bedtime reading on why he should dump the sugar program, I suggest he go straight to pages 147, 154–55, 160–62, and 170–72.