Thursday, October 20, 2011

Let's End the Antiquated, Job-Killing Sugar Shaft

From Sen. Jeanne Shaheen (D-N.H.) and Sen. Mark Kirk (R-Ill.), co-sponsors of the Stop Unfair Giveaways and Restrictions Act, writing in Politico:
"U.S. sugar policy is rigged in favor of a handful of large sugar producers — at the expense of everyone else. This is costing consumers and sugar-using businesses $4 billion a year according to a study due to be released Wednesday [MP: That's close to my estimate of $4.5 billion for 2010]. The sugar program is outdated, unneeded and should go. Our bill, the Stop Unfair Giveaways and Restrictions Act, would end this system.

Created in 1934 and modified several times since, the sugar program is a complex system that often escapes public scrutiny. It includes price supports, which establish an artificial floor on sugar, and import restrictions, which prevent foreign sugar from bringing U.S. sugar prices in line with the rest of the world.

The end result is a U.S. sugar price that’s almost twice the world average (see chart above). That translates into a direct impact on U.S. consumers — who buy sugar directly and who buy products made with sugar every day. Americans can’t afford to be wasting that money in today’s difficult economy.

Most alarming, high sugar prices affect jobs. The sugar program benefits about 4,700 growers of sugar cane and sugar beets nationwide. But it hurts more than 600,000 people working in sugar-using industries nationwide — from candy makers to bakers.

High sugar prices were responsible for the loss of 112,000 jobs in those industries between 1997 and 2009, according to industry analysts. For every sugar-growing job saved through high U.S. sugar prices, according to a 2006 Commerce Department study, approximately three jobs in sugar-using industries are lost.

This policy puts U.S. businesses at a terrible disadvantage. Imported products that use sugar are relatively free of punitive tariffs. That means foreign competitors in the confectionery industry are using cheaper sugar so they can undersell American companies. The result is a loss of American jobs as U.S. factories shut down and international firms locate new facilities outside the United States.

This sugar program is antiquated. Supporters of sugar reform, include the Competitive Enterprise Institute, the U.S. Chamber of Commerce, the National Foreign Trade Council, the National Association of Manufacturers and the Consumer Federation of America. All say the program is hurting consumers and businesses.

Democrats and Republicans have come together to push for an end to this program because it is not a partisan issue. It’s about entrenched interests versus sound policy. Sugar price supports are an unnecessary market intervention that have no place in our 21st-century economy."
HT: NCPA

23 Comments:

At 10/20/2011 11:13 AM, OpenID American Delight said...

Sugar shaft? Sweet...

 
At 10/20/2011 11:27 AM, Blogger Chris Burrows said...

Look out! I see a sugar bubble bursting.

 
At 10/20/2011 11:34 AM, Blogger $9,000,000,000 Write Off said...

Sugar protection lobbyist are printing invoices, compiling lists of friendlies, and making reservations at DC steak houses to fight this.

I wonder if those cited sugar using industries are doing the same?

 
At 10/20/2011 12:17 PM, Blogger James said...

This comment has been removed by the author.

 
At 10/20/2011 12:19 PM, Blogger James said...

As is typical of free trade sycophants addressing tariffs this article points out only the downside of the sugar tariff. A compliment to articles pointing out only the upside of free trade. Free traders always avoid examination of the net impact. Strictly a hear no evil, see no evil, speak no evil approach.

 
At 10/20/2011 12:29 PM, Blogger Benjamin said...

How about the $32 billion given--hand outs--to cotton farmers since 1995?

We have a pink agriculture system in the United States. The entire sector is mollycoddled, enfeebled, knock-kneed and government subsidized. They socialize the risks and expenses and privatize the gains in our ag sector.

Never a topic in the faux right-wing echo chambers---but after all, the GOP is all about carving money off for cronies, through government.

 
At 10/20/2011 12:31 PM, Blogger Buddy R Pacifico said...

More on the sugar market distortions;

Since 2001 world sugar prices are up 272 % to 26 cents per lb.

vs. U.S. Import sugar prices up 84%, over the last decade, to a price of 40 cents per pound.

OK, sugar exporters to the U.S. are getting 65% more than shipping to other countries. Does this mean that the U.S. has been helping the economies of sugar exporters to the U.S. This might be a form of foreign aid to some central and latin countries.

 
At 10/20/2011 3:20 PM, Blogger VangelV said...

Why not just end all agricultural subsidies?

 
At 10/20/2011 3:38 PM, Blogger Paul said...

Benji,

"Never a topic in the faux right-wing echo chambers---but after all, the GOP is all about carving money off for cronies, through government."

Idiot. You obviously never read right-wing pundits. Meanwhile, your boyfriend pours on the ethanol boondoggles and flushes billions down the green jobs rat hole.

 
At 10/20/2011 3:41 PM, Blogger Buddy R Pacifico said...

Who is the leading supplier of sugar to the U.S.? Mexico, whose exports to the U.S. have surged 200% recently. So, under NAFTA, Mexico gets a sweet deal.

BTW, Mexico imports sugar to keep a certain domestic level of reserves. Hmmmm.

 
At 10/20/2011 3:49 PM, Blogger Benjamin said...

Paul-

I am injured by your ad hominem attacks. If you dislike the D-Party, say so. If you like the GOP, say so.

But why personally attack me?

If I am cut, do I not bleed? If I am struck, do I not bruise?

 
At 10/20/2011 4:40 PM, Blogger SanFranDan said...

This analysis also ignores the harm the tariff does by incentivizing companies to switch from using sugar, to using sugar substitutes (i.e. corn syrup). Aside from the health effects, Mexican Coke taste much better because it uses real sugar.

 
At 10/20/2011 4:42 PM, Blogger Seth said...

"As is typical of free trade sycophants addressing tariffs this article points out only the downside of the sugar tariff."

Did you miss this?

"The sugar program benefits about 4,700 growers of sugar cane and sugar beets nationwide."

 
At 10/20/2011 5:46 PM, Blogger Paul said...

Benji,

"But why personally attack me?"

Because you're an idiot, immune to any logical discourse.

 
At 10/20/2011 6:34 PM, Blogger Itchy said...

No one has mentioned that Brazil makes it's ethanol from sugar cane while the combination of the sugar lobby and corn lobby force US tax payers to subsidize the inefficient use of corn for fuel.

 
At 10/20/2011 7:26 PM, Blogger Benjamin said...

Paul--

I am deeply discouraged and wounded by your insensitive and personally derogatory commentary.

 
At 10/20/2011 10:59 PM, Blogger Ron H. said...

James: "As is typical of free trade sycophants addressing tariffs this article points out only the downside of the sugar tariff. A compliment to articles pointing out only the upside of free trade. Free traders always avoid examination of the net impact. Strictly a hear no evil, see no evil, speak no evil approach."

So, what's the upside to the sugar tariff?

I looks like the net impact is negative, as one would expect with any tariff.

 
At 10/20/2011 11:02 PM, Blogger Ron H. said...

Bunnie

"If I am cut, do I not bleed? If I am struck, do I not bruise?"

You probably do, but no matter what, you won't shut up.

 
At 10/21/2011 3:05 AM, Blogger sethstorm said...


High sugar prices were responsible for the loss of 112,000 jobs in those industries between 1997 and 2009, according to industry analysts. For every sugar-growing job saved through high U.S. sugar prices, according to a 2006 Commerce Department study, approximately three jobs in sugar-using industries are lost.

No proof.


mported products that use sugar are relatively free of punitive tariffs. That means foreign competitors in the confectionery industry are using cheaper sugar so they can undersell American companies. The result is a loss of American jobs as U.S. factories shut down and international firms locate new facilities outside the United States.

Fix that problem with a tariff.

 
At 10/21/2011 12:23 PM, Blogger Unknown Blogger said...

@sethstorm:
"'High sugar prices were responsible for the loss of 112,000 jobs in those industries between 1997 and 2009, according to industry analysts...'

No proof."

I agree. Survey results are not a great way to gather this data.
That said, the higher sugar prices will have at least one of the following adverse affects:
1 - higher prices for consumers
2 - lower wages for workers at sugar using industries
3 - less reinvestment of profits in the businesses that use sugar.


"'Imported products that use sugar are relatively free of punitive tariffs...'
Fix that problem with a tariff."

Sure, lets solve one problem that causes higher prices for US consumers with a solution that will cause more higher prices for US consumers. Tariffs are essentially taxes that redistribute wealth from the general population to the protected industry. How do you not see that?

 
At 10/21/2011 12:39 PM, Blogger Ron H. said...

"No proof."

What would you accept as proof? Commerce Dept. studies are fairly easy for anyone to find, so you might look it up before blurting out stupid things like that.

If you don't trust Commerce Dept., what other information would you trust? Or, do you just like to cover your ears & say "I don't want to hear that! It can't be true!"

Similarly easy information to find would be the number of sugar related jobs protected by the tariff, and the amount the tariff costs sugar buyers. If the $4bn and 4700 jobs numbers are correct, then each one of those jobs costs the rest of us over $800,000.

Is that OK with you?

We would be much better off offering each of those workers $50k/yr to sit at home like you do, and not worry about sugar jobs.

 
At 10/21/2011 1:34 PM, Blogger VangelV said...

Sure, lets solve one problem that causes higher prices for US consumers with a solution that will cause more higher prices for US consumers. Tariffs are essentially taxes that redistribute wealth from the general population to the protected industry. How do you not see that?

Your friend does not care about consumers having to pay higher prices. He cares about protecting those that get the benefits from tariffs instead. Do you really want the large agricultural players to close down marginal operations or report lower earnings to their shareholders? As far as your friend is concerned it is better to make consumers pay more and to prevent the creation of new jobs than to see lower profits being reported and existing jobs in inefficient operations be lost.

 
At 10/24/2011 2:16 PM, OpenID voxrationalis said...

The sugar subsidy, like all similar agricultural subsidies, is an abomination and should be ended forthwith.

 

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