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The Wall Street Journal reports today that three giant sugar companies received more than half of all sugar loans in the past year. But there’s trouble brewing:
Disclosure of the loan recipients comes as domestic sugar prices are trading around four-year lows, raising concerns that some processors—who turn sugar cane or sugar beets into the sweetener—may not be able to repay what they owe.
….During the past nine years, the government has lent $8.8 billion to sugar processors. The 2012 loans were granted with an interest rate of 1.125% to 1.250%, depending on the month in which they were issued….In case of a default, a processor would pay the government back in sugar rather than cash; the sugar is then typically sold by the USDA at a loss.
I’ll bet college students wish they could get a deal like that. Instead they’ll soon be getting their loans at 6.8 percent—with no allowance whatsoever for default until the day they die, let alone the possibility of repaying the government in used textbooks or something. Let us all now take a moment to marvel at our national priorities.