End the Global Sugar Wars by Ending Government Manipulation

“The continued tussle between sugar producers seeking limited imports and a safety net for producers and sugar users seeking reforms to the (U.S.) sugar program were obvious in speeches at the International Sweetener Symposium this week,” reports Ron Sterk for BakingBusiness.com.

At issue are non-stop efforts by candy and sweets manufacturers to open up the U.S. sugar market to artificially cheap sugar from foreign countries that heavily subsidize their own sugar production and exports.

“Sugar policy is the least expensive commodity policy in the farm bill and it gives efficient U.S. producers an opportunity to compete in a global market awash in subsidization and manipulation,” said Jack Roney, director of economics and policy analysis for the American Sugar Alliance.

Indeed, recent reports coming out of India highlights such government subsidization in light of a serious threat from the nation’s “95-odd sugar mills” that have decided to cease crushing operations for sugarcane this fall unless the government concedes to certain demands.

Among those demands is for the government to “link its mandated price” for cane “to the market price of sugar.”  The mills claim the highly inflated price the government currently forces the mills to pay farmers is “unrealistic.”

“In the past four years, the (Indian) government has raised the sugarcane SAP (State Advised Price) by almost 70 percent,” Abinash Verman, director general of Indian Sugar Mills Association, “while sugar prices have increased by only seven to ten percent.”

Such unrest due to government interference in sugar giant India’s agricultural market will result in further instability in the global sugar market; instability that ultimately could harm U.S. sugar consumers should the current U.S. sugar policy be scrapped without simultaneous reforms eliminating government subsidization in other countries.

“Trade wars,” wrote Seton Motley recently, “actually aren’t about trade; they are about government trade policy.  If peoples are trading freely, there isn’t a ‘war,’ there’s commerce.

“The ‘wars’ only happen when government gets involved, placing tariffs, regulations and subsidies in the way of the flow,” Motley continued.  “It becomes a regulatory arms race.  A government imposes another subsidy or tax, so several others in response impose new subsidies and taxes of their own.  Lather, rinse, repeat.

“It is neither free nor fair trade when a nation’s industry succeeds not by being better, but by being better government-subsidized and tariff-protected,” Motley concluded.  “So we need to as much as possible get governments out of the trade-war-making, industries-and-market-warping business.”  Amen.