Politico-Economic Analysis of the US Sugar Programme

This paper presents a politico-economic analysis of decision making about the US sugar programme. It analyz.es the linkages between the economic surpluses of market participants and the policy response via the level of target prices and import quotas. The legislative decisions of the sugar programme are captured by the target price choices, while the administrative aspe.cts of the programme are captured by the import quota choices. Explanatory variables in the empirical model include domestic sugar producer and consumer surplus, com sweetener prcxlucer surplus, sugar quasi-rents of US quota-holding countries. and US federal budget deficit. Target price decisions were found to be weakly linked to domestic sugar producer surplus but strongly linked to com sweetener producer surplus. The impact of the federal budget deficit on quota levels is clear. Restrictive quotas reduce Treasury outlays while supporting domestic producers. The influences of various market participants are also examined for both target prices and import quotas.