Gains and Losses of Sugar Program Policy Options
1987
Leu, Gwo‐Jiun M. | Schmitz, Andrew | Knutson, Ronald D.
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.
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