The federal sugar program is one of those strange Washington creations that has survived long after its gross defects became common knowledge to anyone paying attention. The complex scheme has a simple purpose: keeping American sugar prices high by restricting production and blocking imports. And it works brilliantly — in that the price of sugar in this country generally runs about double the world price.
This achievement is a boon if, say, you grow or process sugar cane or sugar beets. But if you buy, use or eat sugar, as most everyone does, it’s hard to swallow. Plenty of companies that make candy and other sweetened products have moved their operations to countries where sugar is available at a more reasonable cost.
In 2003, Chicago lost a Brach’s factory, with much of the work being moved to Mexico. Kraft closed a Life Savers plant in Holland, Mich., and shifted production to Canada.
John Brooks, president of a Los Angeles candy company that opened a factory in Tijuana, explained his options to The New York Times: “You move or you go out of business.” The Commerce Department has estimated that those high U.S. prices destroy three times more jobs than they preserve.
The Canadian Sugar Institute, whose members profit from the rigged system here, notes that its industry operates “under an open market policy, based on the principles of free trade. By aligning sugar prices closely with world market raw sugar prices, Canadian refiners have been able to market refined sugar at prices below those of almost all other industrial nations.”
Why haven’t we tried that? Plenty of agricultural commodities, after all, are grown without these elaborate government controls. But a small, well-organized special interest group has persuaded Congress to preserve a system that disables the free market in favor of letting bureaucrats and politicians determine prices and production. The government even decides how much of the supply will come from beets and how much from cane. A Soviet central planner would feel right at home.
Congress has the chance to reform or abolish the sugar program as it considers the 2018 farm bill. An attempt four years ago narrowly failed, and supporters of the status quo are gearing up to keep what they’ve got.
But if our lawmakers leave the sugar program intact, they will be punishing consumers and companies that use sugar, inflicting economic costs that greatly exceed the benefits. It’s enough to make your teeth ache.
Editorial by the Chicago Tribune
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