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Sour on the Sugar Bailout

• March 13, 2013 • 4:27 PM

Alexandra Wexler of The Wall Street Journal reported yesterday that the U.S. department of Agriculture is looking to prop up sagging sugar prices by buying 400,000 tons of the stuff. The purchases would keep sugar processors from defaulting on loans the agency made to them nine months ago, when prices were 18 months higher.

According to the USDA, the loan program, first authorized under the 1934 Sugar Act, “helps to stabilize America’s sugar industry and ensure the well being of agriculture in the United States.” The program turns out to be somewhat contentious, in part because it’s not supposed to costs taxpayers anything but does, in part because Big Sugar (just add ‘big’ in front of anything to make it sound ominous) reaps the benefits while consumers end up paying more for sugary goodness than they would otherwise, and in part because it deals with, well, sugar.

Except when it’s being pitted against corn syrup, sugar tends to get a black eye in public discourse these days, even when it wins a round (e.g. Bloomie’s setback on large sodas last week). Add in government support, and things get, umm, sticky. Rather than helping out sugar, some economists argue we should tax it. Even market proponents get riled over this—Aaron Trask over at Yahoo! Finance railed at Washington over the sugar bailout, juxtaposing the U.S. fiscal crisis and its obesity epidemic against the subsidized fattener:

Whatever you think about Obamacare, my hope is that if we’re going to have more government involvement in the health care that the same government would be do everything to keep costs down. This “sugar bailout” strikes me as the opposite of that; if it’s not hypocritical, it sure is stupid.

So this was a good day to reintroduce our piece on pediatric endocrinologist Robert Lustig, who—according to our writer Elizabeth Weil—says “the ubiquity of sugar in the Western diet is making Americans sick, obese, and bankrupt.” Lustig’s new book, Fat Chance: Beating the Odds Against Sugar, Processed Food, Obesity, and Disease, expands that thesis in 336 pages.

Weil’s lengthy piece offers a good look at the sugar wars, and the controversial figure of Lustig, and is worth a read if you haven’t already. Here’s two tidbits from her article apropos to today’s news to whet your appetite:

Seventy-five percent of food items sold in the United States have added sugar. According to Lustig, 90 percent are sold by ten conglomerates. Conventional wisdom holds that the federal legislature is useless, paralyzed by a farm bill that is beholden to extremely powerful and wealthy special-interest groups and that underwrites the cost of growing corn, rice, and wheat, even though American would be well served by eating less of that stuff.

Lustig’s modest-sounding, medium-term goal is to get sugar removed from something called the “Generally Recognized as Safe” list at the FDA. Items listed as GRAS aren’t considered food additives, so manufacturers can include them in any food products in any quantities they wish. Lustig’s plan seems reasonable enough. According to the FDA, “For a substance to be GRAS, the scientific data and information about the use of a substance must be widely known and … establish that the substance is safe under the conditions of its intended use.” When the FDA last reviewed the safety of sugar, in 1986, the agency assumed Americans ate 40 pounds of sugar annually and acknowledged that significantly increased sugar consumption would carry health risks. Currently, the U.S. Department of Agriculture puts annual sugar consumption at more than 90 pounds.

Michael Todd
Most of Michael Todd's career has been spent in newspaper journalism, ranging from papers in the Marshall Islands to tiny California farming communities. Before joining the publishing arm of the Miller-McCune Center, he was managing editor of the national magazine Hispanic Business.

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