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Gains and Losses of Sugar Program Policy Options

Author

Listed:
  • Gwo-Jiun M. Leu
  • Andrew Schmitz
  • Ronald D. Knutson

Abstract

High domestic sugar prices supported by U.S. sugar policy have induced a significant substitution of corn sweeteners for sugar. Recognizing the close relationship between sugar and corn sweeteners, this study applies a general equilibrium approach to evaluate the distributional effects of three different policy options (i.e., quota, tariff, and deficiency payment) on sugar related interest groups. The results show that the current quota policy, intended ostensibly to protect domestic sugar producers, have hurt foreign exporters. It will harm domestic sugar producers if the trend continues. Additionally, the quota program is the most expensive of the options considered.

Suggested Citation

  • Gwo-Jiun M. Leu & Andrew Schmitz & Ronald D. Knutson, 1987. "Gains and Losses of Sugar Program Policy Options," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 69(3), pages 591-602.
    • Handle: RePEc:oup:ajagec:v:69:y:1987:i:3:p:591-602.
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    Citations

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    Cited by:

    1. David Abler & John C. Beghin & David Blandford & Amani Elobeid, 2008. "Changing the U.S. Sugar Program into a Standard Crop Program: Consequences under the North American Free Trade Agreement and Doha," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 30(1), pages 82-102.
    2. Schmitz, Troy G. & Lewis, Karen E., 2015. "Impact of NAFTA on U.S. and Mexican Sugar Markets," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 40(3), pages 1-18, September.
    3. Robert C. Feenstra, 1992. "How Costly Is Protectionism?," Journal of Economic Perspectives, American Economic Association, vol. 6(3), pages 159-178, Summer.
    4. Knutson, Ronald D. & Westhoff, Patrick C. & Sherwell, Pablo, 2010. "Trade Liberalizing Impacts of NAFTA in Sugar: Global Implications," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 13(4), pages 1-16.
    5. Messina, William A., Jr. & Seale, James L., Jr., 1990. "U.S. Sugar Policy: A Welfare Analysis Of Policy Options Under Pending Caribbean Basin Expansion Act Legislation," 1990 Annual meeting, August 5-8, Vancouver, Canada 270878, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    6. Bullock, David S. & Salhofer, Klaus, 2003. "Judging agricultural policies: a survey," Agricultural Economics, Blackwell, vol. 28(3), pages 225-243, May.
    7. Christian, Douglas & Schmitz, Andrew, 1992. "Policy Determination In Agriculture: Are Different Welfare Weights Needed?," 1992 Annual Meeting, August 9-12, Baltimore, Maryland 271392, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    8. D.S. Bullock & K. Salhofer, 1998. "Measuring the social costs of suboptimal combinations of policy instruments: A general framework and an example," Agricultural Economics, International Association of Agricultural Economists, vol. 18(3), pages 249-259, May.
    9. Fujimoto, Takashi & Watanabe, Masahide, 2022. "Comparison of the price adjustment program and subsidy scheme in Japan: Evaluation of domestic sugar support policy to internalize positive externalities," Japan and the World Economy, Elsevier, vol. 61(C).
    10. Lopez, Rigoberto A. & Sachtler, Kay G., 1988. "An Econometric Analysis Of U.S. Sugar Import Quota And Target Price Choices," 1988 Annual Meeting, August 1-3, Knoxville, Tennessee 270312, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    11. Boyd, Roy & Doroodian, Khosrow & Power, Amy, 1996. "The impact of removing the sugar quota on the U.S. economy: A general equilibrium analysis," Journal of Policy Modeling, Elsevier, vol. 18(2), pages 185-201, April.
    12. Robert C. Feenstra, 1989. "Auctioning U.S. Import Quotas, Foreign Response, and Alternative Policies," NBER Working Papers 2839, National Bureau of Economic Research, Inc.
    13. Schmitz, Andrew, 1995. "Sugar: The Free Trade Myth and the Reality of European Subsidies," International Working Paper Series 237436, University of Florida, Food and Resource Economics Department.
    14. Christian, Douglas & Schmitz, Andrew, 1992. "The Adoption of Welfare-Reducing Policies: An Alternative Explanation from U.S. Agriculture," CUDARE Working Papers 198607, University of California, Berkeley, Department of Agricultural and Resource Economics.
    15. baharumshah, ahmad, 1992. "Income Redistribution Through Commodity Programmes and the Marginal Welfare Cost of Taxation," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 25(June), pages 47-61.
    16. David S. Bullock & Klaus Salhofer & Jukka Kola, 1999. "The Normative Analysis of Agricultural Policy: A General Framework and Review," Journal of Agricultural Economics, Wiley Blackwell, vol. 50(3), pages 512-535, September.
    17. Katranidis, Stelios D. & Velentzas, Kostas, 2000. "The Markets of Cotton Seed and Maize in Greece: Welfare Implications of the Common Agricultural Policy," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 1(2), pages 1-16, August.
    18. Oral Williams & David Bessler, 1997. "Cointegration: implications for the market efficiencies of the high fructose corn syrup and refined sugar markets," Applied Economics, Taylor & Francis Journals, vol. 29(2), pages 225-232.
    19. Schmitz, Andrew & Vercammen, James, 1990. "Trade Liberalization in the World Sugar Market: Playing on a Level Field?," CUDARE Working Papers 198574, University of California, Berkeley, Department of Agricultural and Resource Economics.
    20. Aradhyula, Satheesh Venkata, 1989. "Policy structure, output supply and input demand for US crops," ISU General Staff Papers 198901010800009909, Iowa State University, Department of Economics.

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