The US Department of Agriculture is planning to buy 400,000 tons of sugar to prop up sugar prices. That's $168 million worth of sugar, at the March price of 21.03 cents a pound. Where is that sequester when you need it?
According to the Wall St Journal, USDA is motivated by a desire to prevent bankruptcy among sugar producers who have borrowed $862 million from USDA this growing season. If the producers go broke, Uncle doesn't get paid back, at least not in dollars. Apparently the sugar borrowers pledge their crops as security for the loans. If they don't have money, they give the sugar to Uncle Sam instead of dollars. Last time this happened, 2000, Uncle wound up the proud owner of one million tons of sugar. At least sugar isn't perishable, that gives bureaucrats some years to figure out how to get rid of it. The 2008 farm bill calls for this sugar to be made into ethanol and added to gasoline.
In addition to cheap loans and price supports, the sugar industry gets tariff protection. World sugar prices are only 18 cents a pound, compared with 21 cents a pound inside the US. The National Confectioners Association, big sugar consumers, claim the sugar producers have cost US consumers $14 billion in higher sugar prices since the 2008 farm bill passed.
One bright spot. Our democratic senator, Jeanne Shaheen calls this swindle "unacceptable" and is sponsoring a bill to "give the USDA more flexibility in handling the sugar program". More flexibility my foot, she ought to sponsor a bill to shut this scam down completely.