The Economic and Political Factors Affecting the U.S. Sugar Subsidy Program :: Sugar Subsidy Economics Essays

The Economic and Political Factors Affecting the U.S. scraping Subsidy ProgramGraphs Not Available cabbage growers continue to proceeds from favorable economic conditions provided by the U.S. government. Yet empirical data breach a decrease in the aggregate support for dulcorate commandment in recent years. In 1978, there were 9,187 full or sort owners of sugar cane and sugar beet farms, compared to 7,799 farms in 1987. The level of sugar subsidy allocated to the farmers, however, has increased and even favored certain sugar growers disproportionately over others. Such empirical findings suggests that politics, as much as economics, be active the level of sugar subsidy. This paper examines why an increasingly smaller good turn of sugar farmers receive a steady larger government subsidy. Mainstream economics cannot explain the unusual linkage between sugar producers and subsidy levels. tour traditional, neoclassical economists cultivate elegant models that explain economic phenomena, they fail to remember correctly the relationship between voters, their elected representatives, and the political institutions which shape the policies. Consequently, an blameless model must combine what we know from mainstream economics and political economy. onwards outlining the theoretical framework, however, the following section reviews the history of the sugar subsidy. History of Sugar Subsidy The Jones-Costigan Act, created the modern sugar program as part of the in the raw Deal package of agricultural legislation in 1934. The program include domestic production controls and direct payments to farmers, as swell as importation restrictions that addressed the declining ratio of farm to non-farm incomes of the preceding decade (Harper, 1990). The first major transformation of the U.S. sugar program resulted from the U.S. trade embargo of Cubas exports to the U.S. in 1963. end-to-end the following years, the United States government imposed a series of damage supports, import quotas, and loans to protect U.S. producers from lower-priced foreign grown sugar as well as to encourage domestic production of sugar (Rendelman, 1989). Many farmers in the U.S. began to supplement the dearth of sugar left by the embargo and turn the protected market conditions provided by the U.S. government subsidy. Despite the federal uphold granted to sugar growers, not all sectors of agriculture devoted to growing sugar derivatives flourished. Domestic production of sugar cane increased steadily from 1982 onward, while sugar beet production stagnated (Knutson, 1985). Through time, the largest number of sugar beet farmers were concentrated in a specific West/ middle west region of the U.S. (Minnesota, North Dakota, Idaho) while sugar cane farmers were found in the Southeast, specifically Louisiana and Florida.