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There is little the U.S. can do with the sugar. It can attempt to get back some of the money by selling the sugar to ethanol producers for biofuel, but it often gets only drastically reduced prices that leave taxpayers on the hook for the difference.

Bloomberg News reported last year that producers could default on as much as $862 million in federal loans because of falling sugar prices.

Meanwhile, in an effort to keep U.S. sugar prices high, the USDA bought $280 million in excess product in 2013, further putting taxpayers at risk for a massive loss of money.

But supporters of the subsidies say the real problem is Mexico. America’s southern neighbor has been heavily supporting its own sugar industry, which is about 20 percent owned by the national government.

Trade agreements have allowed Mexico to sell sugar without regard to U.S. import quotas. But analysts say the Mexican sugar industry is selling the sweet stuff at far below the market rate, a practice known as “dumping.”

The U.S. sugar industry was harmed — some say it nearly collapsed — as a result of the flood of cheap sugar from Mexico. That was when the Agriculture Department bought $280 million worth of sugar in an attempt to take the excess product off the market.

“The only reason the USDA took any action was because of Mexico,” said Phillip Hayes, a spokesman for the American Sugar Alliance. “You have a Mexican industry that dumped more than 1 million tons of sugar into the U.S. market.”

A large number of sugar companies would have gone out of business had the government not made the move, he said. The industry wants fair and free trade, but the influx of sugar from Mexico will continue to cause harm, he said.

“We believe injury has been done not only to producers, but that injury has been done to U.S. taxpayers,” Mr. Hayes said.

Trying to undercut local markets by arbitrarily lowering the price on something, dumping is generally frowned on in international economics. Indeed, a coalition of sugar groups has filed a complaint against Mexico’s practices.

The Commerce Department announced Friday that they will investigate whether Mexico’s practices are violating trade law. An initial assessment is expected in May.

A spokeswoman for the Mexican Embassy in Washington said all officials were in meetings the rest of the week and would not be able to respond to questions until Monday.

Daniel Pearson, an analyst on trade policy at the Cato Institute, a libertarian think tank that supports free trade, said he thinks the sugar industry is often stuck between a rock and a hard place.

Sugar producers don’t always want the USDA to be making large, often unpopular, purchases to stabilize the market, instead believing they are efficient enough to compete on the world stage unassisted. But without federal aid, they might be unable to compete with countries that artificially lower their sugar prices, he said.

In the meantime, consumers are paying for federal policies that keep sugar prices arbitrarily high.

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