The United States Government Accountability Office (GAO) released a new report detailing the impact of the U.S. sugar program on American consumers, food manufacturers, and sugar producers. The report confirmed that the U.S. sugar program is creating supply shortages for domestic food production and contributing to higher costs for manufacturers, workers, and American families. Further, the study found that the program is a net drag on the U.S. economy, ultimately costing consumers more than sugar producers benefit.

The U.S. sugar policy is a federal commodity support program that requires a minimum price for sugar. The program uses import quotas, limits on domestic production, and other initiatives to ensure that domestic prices for raw and refined sugar are approximately 100% higher than world prices.

“For too long, the discussion over the U.S. sugar program in Washington has pit America’s food manufacturers and sugar producers against one another,” said Grant Colvin, executive director of the Alliance for Fair Sugar Policy. “The GAO cuts through this false choice and shows that commonsense updates to the U.S. sugar program not only will increase supply chain reliability for manufacturers and lower costs for consumers, but also can be done while protecting the farm safety net for sugar producers.”

Among the findings, the GAO noted that:

  • The U.S sugar program costs consumers $2.5-$3.5 billion through inflated food costs each year and disproportionately affects low-income households;
  • The effect of the U.S. sugar program on prices and supply creates an incentive for American manufacturers to move operations to lower cost countries;
  • Notably, America is second only to China in providing government support for the sugar industry, making sugar the most protected U.S. agricultural or non-agricultural product;
  • Annual raw sugar imports since 1996 have been less than U.S. allocations, reflecting program dysfunction even amid domestic supply challenges.

The GAO recommended several ways to modernize the U.S. sugar program to address supply shortages, including:

  • Update the sugar program’s trade rules to ensure that agreed-upon levels of imported sugar are actually available to manufacturers;
  • Give the U.S. Department of Agriculture (USDA) flexibility to bring more sugar into the market exactly when it’s needed by manufacturers and small businesses.

The GAO study included reviews of agency documents and data and interviews of federal officials, academics, and industry stakeholders, including groups representing sugar producers and sugar-using industries. The USDA and the U.S. Trade Representative agree with the GAO’s recommendations.

“The Alliance for Fair Sugar Policy urges the administration to implement these commonsense policy changes quickly. At the same time, we urge members of Congress to review this report and commit to bipartisan reforms of the U.S. sugar program in the 2023 farm bill that will durably address the nation’s sugar supply challenges,” continued Colvin.

To learn more about the Alliance for Fair Sugar Policy and the need for sugar reform, visit FairSugarPolicy.org.