Sugar Subsidies Not So Sweet

March 17, 2010

Americans pay a lot more for sugar than do people in other countries. The culprit is the government, which imposes trade barriers and other damaging regulations on the industry.

The spread between what Americans and the rest of the world pay for sugar has recently hit highs last seen in 1999. As of Friday, the price per pound of raw sugar in the U.S. was 78 percent higher than the global price. 

The government-generated high price damages average families and U.S. companies that use sugar in production, such as food and candy companies. These companies are pleading with the Soviet-style planners at the Department of Agriculture to increase the sugar import quota in order to ease prices. Note to those who dislike corporate lobbying: this effort by U.S. businesses is pro-market and pro-consumer. 

The anti-market side of the business world in this case is represented by the American Sugar Alliance, which represents sugar growers. They are claiming that the food companies just want to “boost profits.” Well duh! All businesses try to boost their profits, which anyone who has taken Econ 101 understands is a good thing. The problem is when businesses use the coercive power of government to bludgeon other companies and consumers, which is what the sugar growers do.       

See this essay for more on agricultural regulations and trade barriers, including sugar protectionism.



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