Sugar prices are “historically low” this year, and the USDA simply will not stand for that:
The federal government will intervene in the sugar market for the first time in more than a decade, spending up to $38 million in an effort to forestall a later bailout of sugar producers in Minnesota and elsewhere that could cost more than $300 million.
Minnesota is home to the nation’s largest beet sugar industry, which is protected by import tariffs and supported by loan guarantees.
This intervention smacks (but not Sugar Smacks) of Rube Goldberg:
The USDA market intervention involves buying sugar from domestic producers, then swapping it for import credits allotted to coastal U.S. sugar refineries under a “re-export” program. The coastal refineries get a credit for the imports, but must then export the finished product so as not to compete with domestic sugar suppliers.
This is consistent with other current government programs intended to save everyone’s job but yours.
(Via Amy Alkon.)