WILLINGNESS TO PAY FOR SURPLUS SUGAR IN THE UNITED STATES |
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| Authors: | HONGLI FENG CHAD HART |
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| Institution: | 1. Feng: Adjunct Assistant Professor, Department of Economics, Iowa State University, Ames, IA 50011, USA. Phone 515‐294‐6307, Fax 515‐294‐0221, E‐mail: hfeng@iastate.edu;2. Hart: Assistant Professor, Department of Economics, Iowa State University, Ames, IA 50011, USA. Phone 515‐294‐9911, Fax 515‐294‐0221, E‐mail: chart@iastate.edu;3. The authors thank Bruce Babcock at Iowa State University for constructive comments. The authors also express their gratitude to Daniel Colacicco at the Farm Service Agency, the USDA;4. Stephen Haley at the Economic Research Service, the USDA;5. Dave Hull at the Congressional Budget Office;6. Remy Jurenas at the Congressional Research Service;7. Michael Salassi at Louisiana State University;8. and Housein Shapouri at the Office of Chief Economist, the USDA for providing data or helpful discussions. The authors are solely responsible for errors or omissions in the paper. |
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| Abstract: | Sugar supply is managed in the United States to support minimum prices set by law. The 2008 farm bill contains the sugar‐to‐ethanol program to sell surplus sugar to ethanol producers and a program that allows bids from sugar processors. The sugar program is required to run at no net cost to taxpayers. Bids for surplus sugar are analyzed under various scenarios. Sugar processors will outbid ethanol producers given current ethanol prices. At present, surplus sugar bids will not exceed the minimum prices, and the sugar‐to‐ethanol program will not be able to help the government achieve no net program costs. (JEL Q18, Q42, Q48) |
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