Pakistani Sugar Mills Demand Continued Government Support

(Chuck Muth) – Even as some in Congress continue demanding unilateral disarmament via the elimination of the current U.S. domestic sugar program, Pakistan is preparing to artificially prop up global sugar prices in the face of a worldwide sugar glut.

Following closely on India’s announcement two weeks ago that it was dramatically boosting subsidies to its sugar mills, the Pakistan Sugar Mills Association (PSMA) petitioned its own government last week for a continuation of its own governmental sugar subsidy program.

Isn’t the “free market” wonderful?

Jawwad Rizvi of TheNews.com.pk reports that in a letter written to Pakistan’s government authorities, the PSMA is requesting continuation of the current program of sugar subsidies “in order to safeguard sugarcane growers,” and that “export incentives…should be continued in letter and spirit.”

The PSMA said it appreciates the “coordination” between the State Bank of Pakistan and the Ministry of Commerce “and suggested that the government ask them to further fine tune the existing sugar export policy,” arguing that “it is imperative that the viability of the industry should be ensured.”

Rizvi’s story notes that Pakistan’s domestic sugar production “is estimated in excess of six million tons, while the domestic consumption is limited to 4.5 million tons.” As such, unless the government subsidizes the export of the surplus into the global market, PSMA warns that “the entire (sugar) industry will plunge into a financial debacle.”

Amazingly, all of the global market conditions that have Pakistan’s sugar industry in a panic pose similar risks to the U.S. sugar industry. Yet the attitude by some in Congress appears to be, “So what?”

Do we really want to find out?

The solution, of course, is to eliminate the U.S. sugar program…but only if its elimination in an artificially deflated worldwide subsidized market doesn’t result in the elimination of the U.S. sugar industry itself.

To accomplish that will require simultaneous elimination of all government subsidy programs from all sugar-producing nations, not just here in the U.S. We’ll zero out ours if and when they zero out theirs.

And then we’ll let a true free market take it from there.