07.18.2013 1

Unilaterally Disarming in the War on Sugar

By Willie Deutsch

There is a fierce war in America between the sugar producers and large food manufacturers.  While most U.S. crop policies rely on subsidies, America does not subsidize sugar.  Instead U.S. sugar policy is based on sugar tariffs and domestic quotas.  U.S. Sugar production costs the taxpayer $0.00 and supports 142,000 jobs, but the protectionist policies keep prices high which acts as a tax on consumers.  According to the Department of Commerce, sugar policy, “costs more U.S. jobs than it helps protect.”

The challenge for the U.S. sugar producers is the international market forces.  Two factors particularly hurt the producer:  1.) The U.S. cannot limit sugar from Mexico, which can now ship unlimited quantities once NAFTA took full effect on January 1, 2008.  This has created unsustainable oversupplies that could lead to artificially low prices and eventually taxpayer cost.  2.) Brazil has seized control of fifty percent of global exports using decades of heavy subsidization and now wields price-setting powers on the global market, as seen by extremely volatile prices since 2008.

Read the full study, The Case for Zero Based Sugar Policy by Dr. Mark Hartley.

A new study by the Americans for Limited Government Foundation, entitled “The Case for Zero Based Sugar Policy” by Dr. Mark Hartley of the College of Charleston, provides a free market solution that both the producer and food manufacturers can agree to.

The solution is for America to promise to remove its protectionist policy once Brazil, Mexico, and other foreign countries do the same.  By leveling the playing field and making the marketplace fair, global free market forces will be allowed to drive the market.

This is a solution currently being championed by the American Conservative Union and Florida Congressman Ted Yoho.  The study demonstrates how allowing the free market to work would help all parties involved.

“Under this approach U.S. officials would push for zero subsidies abroad while using the promise of zero subsidies at home as incentive.  As proposed, a zero for zero sugar policy would lift restrictions and tariffs on trade between all players in the global sugar market and would target market-distorting policies, including direct and indirect subsidies. Furthermore, leveling the playing field would be advantageous for consumers, the candy industry and sugar farmers, as all parties would be paying lower prices with less government oversight. ”

Conservatives have long advocated that the free market is the answer to our economic problems.  Hartley’s study analyzes both sides of the issue, and how the European Union dealt with sugar policy to show that the free market is the best solution for addressing America’s sugar policy.

Richard Manning, Vice President of Public Policy and Communications for Americans for Limited Government Foundation, notes, “the contentious debate has always centered on how to achieve a true free market ideal, and Dr. Hartley threads that needle in this just released paper.”

By getting all countries to disarm and disengage from their protectionist sugar policies all the benefits of the free market will be brought to sugar policy.

Willie Deutsch is Editor-in-Chief for NetRightDaily.com, and Social Media Director for Americans for Limited Government.

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