The present sugar program, created by the 1981 Farm Bill, consists of a domestic commodity loan program that sets a support price (loan rate) for sugar and establishes an import quota system that restricts foreign competition and ensures a high domestic price for sugar. Instead of a more stable sugar economy, the result is higher prices for everything that contains sugar.

A recent study conducted by the General Accounting Office (GAO) demonstrated that the sugar program costs consumers at least $1.9 billion annually in higher costs for their personal purchases of sugar and products containing sugar. According to GAO, the sugar program also another $90 million annually in taxpayer dollars because of higher prices for sugar and sugar-containing products purchased for the federal government's feeding programs.

The program has also virtually destroyed the domestic sugarcane refining industry. Since the program was enacted in 1981, 12 of the industry's 22 refineries have closed. The industry has lost over 40 percent of its former capacity, and thousands of Americans have lost their jobs.

The only protection provided by the sugar program has been to a handful of wealthy sugar barons. Less than one percent (17 cane sugar growers) of the nation's sugar growers gobble up 58 percent of the program benefits. In fact, one grower alone received $65 million. Contrary to popular rhetoric, these are not small family farmers. Rather, they are wealthy members of the sugar cartel, which pumps millions of dollars into congressional campaigns to protect their precious subsidy.

The truth has finally come out. The Clinton Administration's decision this year to purchase sugar to prop up domestic sugar prices finally debunks the myth that the sugar lobby has perpetrated on the U.S. public. The sugar program does come at a cost to taxpayers.

The White House agreed in May to purchase 132,000 tons of sugar, which will cost taxpayers nearly $55 million. However, this is only the beginning. The Clinton Administration acknowledged that this purchase would not help strengthen sugar prices. In fact, according to a report in the highly respected agricultural journal Pro Farmer, U.S. Department of Agriculture (USDA) budget analysts expect the government to spend $140 million on sugar this fiscal year.

The Clinton Administration's mid-session budget review shows that from 2000 through 2005, the sugar program will cost taxpayers at least a cumulative $1 billion.

USDA made this situation worse by ignoring warnings from the Office of Management and Budget and by mismanaging the tariff-rate quota (TRQ) for sugar. Although USDA is supposed to announce the TRQ allocations prior to the beginning of each new fiscal year, this year the TRQ was announced late ? more than a month after the fiscal year began.

If the TRQ is more than 1.5 million tons, U.S. sugar processors are eligible for "non-recourse" loans, which do not have to be repaid. But if the TRQ is less than 1.5 million tons, the loans become recourse, and must be paid back. Last year, USDA came up with the novel approach of announcing an essentially fictional TRQ and simultaneously announcing a real TRQ that would actually be enforced. The fictional TRQ was just over 1.5 million tons ? just enough to give sugar processors the right not to repay their loans. But at the same time, USDA also announced that only 1.25 million tons of the quota could actually be imported.

By putting the "1.5 million" in a press release, USDA gave the sugar processing industry the right not to repay loans made with taxpayer money. And by ensuring that the real TRQ was significantly less than this ? 1.25 million tons ? USDA further restricted imports. A contributing factor in USDA's decision not to reduce the 1.25 million ton figure further is that the United States has an international obligation under the World Trade Organization not to import any less than this amount.

If USDA had followed the intent of the law in 1999, taxpayers would not be paying for federal sugar purchases now. If USDA had announced the TRQ at the true 1.25 million-ton level, then price support loans would have been recourse. Processors would still have received the loans, but they would have had to pay them back with real money, not in sugar.

USDA's administration of the TRQ has been marked by a short-term political focus and a bias in favor of the large domestic sugar interests that have historically wielded influence at the department. Even before this year's fiasco, GAO found that USDA raised sugar costs for users and consumers $400 million higher than would have been necessary to hold sugar prices at the artificially high levels required by law. In other words, USDA has not just imposed the $1.9 billion consumer tax on sugar, but has added another $400 million surcharge to that tax.

The federal government has no business continuing to protect the special interests of sugar growers to the detriment of everyone else. This sweetheart deal for a handful of sugar moguls must be stopped.