Pakistan Targets “Sugar Mafia”

By Chuck Muth, President, Citizen Outreach

Free market advocates continue to assail the U.S. sugar program that protects American sugar producers from “cheaters” on the international stage.  But their arguments ring hollow when you consider the breadth and depth of the manipulations of the global market by certain foreign governments.

For example, Pakistan.

To Prime Minister Imran Khan’s credit, he has supported an investigation by the National Accountability Bureau (NAB) into the nation’s sugar industry.  The audit thus far has found, among other things, that sugar prices have not been based “on the actual cost of production.”

Not exactly a “free market.”

According to a report published last week by the Express Tribune, here are some of the shenanigans being investigated…

• Millions of dollars in “subsidies given to the sugar industry” – including all 80 of the nation’s sugar mills – by successive governments since 1985.
• Political families that have established a sugar “cartel” which has “destroyed others in the industry” through “anti-competitive collusion.”
• Sugar mills that have “concealed production and sales to evade income and sales tax.”
• Other “corporate frauds committed by sugar mills.”
• “Fake export of sugar to Afghanistan and money laundering though bulk cash transactions.”

The Express Tribune went on to report that “sugar barons raked in a ‘windfall profit’ of Rs100 billion during the sugar crisis this year alone.”

“The alleged fraudulent activities,” the publication concluded, “include fudging the production cost to claim subsidies, manipulating the market, underreporting their sales, committing fraud and exploiting farmers.”

A true free market for sugar MUST mean a market free of government subsidies and other manipulations that distort global pricing.  Absent that, it is imperative that Congress keep in place the current U.S. sugar program.