Candy Man’s Complaints Don’t Hold Water

(by Chuck Muth) – In a recent article written by John Harper and published on HoumaToday.com, critics – mostly from the candy industry – once again took after the U.S. sugar program, complaining it hurts American consumers.

“Sugar is a raw material for all kinds of things,” said Ike Brannon of the George W. Bush Institute,  “and we can’t produce those things in a cost-effective basis in the United States anymore because of high sugar prices.”

But Jack Roney, an economist for the American Sugar Alliance, debunks that claim.

“In 1985 the cost of a candy bar was 39 cents,” Roney told Harper.  “The cost of the sugar in that candy bar was 1-3 cents.  Today the cost of that candy bar is $1.39, yet the cost of that sugar remains still 1-3 cents.  The sugar users have never demonstrated a clear intention to pass savings onto the consumers.”

That fact indicates the cost of domestic sugar isn’t the culprit behind consumer price hikes for sweets and other products, but labor costs, regulatory costs, taxation and good old-fashioned American profit-taking.

Still, in an ideal world there’d be no need for the U.S. sugar support program – a policy that protects U.S. sugar farmers from artificially cheap foreign sugar through a combination of import quotas and tariffs.  But we don’t operate in an ideal world.

“Sugar is the most heavily subsidized commodity in the world,” explains Jim Simon, president of the American Sugar Cane League.  “In most of those countries there are millions of cane growers.  They protect that work.  They subsidize that production to make sure those millions of farmers remain unemployed.”

“So what?” ask critics.  Why shouldn’t U.S. consumers enjoy the benefits of cheap sugar imports even if it means putting American sugar producers out of business?

Because if we lose the U.S. domestic sugar industry, the country would be at the mercy of foreign nations who would then be in a position to either jack up the price or cut off supply.

“Sugar was rationed during World War II when foreign sugar growers in Cuba and the Philippines were cut off from supply routes,” Harper notes.  And, Roney points out, when the European Union ended sugar support for its domestic industry and relied on foreign imports, the result was “shortages of sugar in Europe and rationing was reported in Germany.”

So the answer isn’t for the United States to unilaterally disarm its sugar industry and put our long-term national interests at risk, but to work cooperatively with other nations to end all government supports “of the most subsidized commodity in the world” and move to a true global free market.