GAO Criticizes Sugar Program

The Government Accountability Office released a report Oct. 31 finding that current Agriculture Department restrictions on imports of sugar are both a boon to producers and a burden to consumers.

While the current sugar program benefits sugar producers, it yields net costs to the US economy of nearly $1 billion annually, the report found.

“The U.S. sugar program creates net costs to the economy, because higher sugar prices created by the program cost consumers more than producers benefit, according to research GAO reviewed,” per the report.

The report explains that the US Trade Representative’s Office sets the World Trade Organization tariff rate quotas with input from the USDA. However, the decisions are made using 40-year-old data. “Without considering new methods, USDA and USTR may be missing opportunities to make sugar allocations more effective and efficient,” reads the report.
The report included a handful of recommendations for both USDA and USTR.

“GAO is recommending that (1) USDA evaluate the effectiveness of the current method and alternative methods for allocating raw sugar tariff-rate quotas, (2) USTR evaluate alternative allocation methods for consistency with U.S. law and international obligations, and (3) USTR use the results of these evaluations to validate or change its quota allocation method. USDA and USTR concurred with our recommendations,” concluded the report.