The purpose of U.S. sugar policies is to keep domestic prices artificially high, charges Chris Edwards, director of Tax Policy Studies at the Cato Institute, Washington, D.C

The purpose of U.S. sugar policies is to keep domestic prices artificially high, charges Chris Edwards, director of Tax Policy Studies at the Cato Institute, Washington, D.C. In recent decades, U.S. sugar prices typically have been two or more times higher than prices on world markets. The Federal government achieves that result by setting guaranteed prices and backing them up with trade restrictions and production quotas.

Moreover, the USDA makes loans to sugar processors, who use their sugar as collateral. In return, processors agree to pay sugar growers certain minimum prices.

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