Schizophrenic Sugar Critics

(Chuck Muth) – Like Marco Polo, critics of U.S. sugar policies are all over the map.

First they claim and complain that the cost of domestic sugar is too high, even though the cost of domestic sugar is pretty much right where it was some 30 years ago.  Actually, less.

In fact, the average wholesale price of a pound of sugar in the 80’s was 27.06 cents, while the current U.S. wholesale price is around 26.5 cents per pound.  Which means the skyrocketing cost of chocolate bars and other sweets isn’t due to high sugar prices, but other factors.  Primarily increased labor costs.  Oh, and profits.

Nevertheless, these critics want to eliminate the current U.S. sugar policy and allow unlimited imports of heavily-subsidized foreign imports of artificially cheap sugar, all in the name of saving money for consumers.

And while opening the floodgates to cheap, heavily-subsidized foreign sugar may, in the short term, reduce sugar price for consumers a little, it will also inevitably crush our domestic sugar industry.  At which point foreign sugar producers will be free to jack up their prices and U.S. consumers will have nowhere else to turn.  Prices for what has been a pretty stable commodity will eventually shoot through the roof.

On the other hand we have folks who aren’t just opposed to U.S. sugar policy, but sugar itself.  In their minds sugar is a health hazard scourge responsible for an epidemic of obesity.  Indeed, if they had their way sugar would be subjected to heavy “sin” taxes, just like tobacco and alcohol.

So what we have here are critics of U.S. sugar policy clamoring for cheaper sugar prices to purportedly reduce the cost of sugar-related products for consumers while others hope to jack up the cost of sugar-related foods to discourage consumption.  Which means instead of consumers getting a break from cheap imported sugar, the government will get a windfall.

This makes no sense.

Why open the floodgates to cheap, heavily-subsidized foreign sugar for the stated purpose of reducing the cost for consumers only to have those savings erased by increasing taxes on sugar to discourage consumption by the very consumers we’re supposedly trying to help with lower prices?

What we should be doing instead is pursuing efforts to eliminate global sugar policies that warp the sugar market through direct government subsidies, bailouts, interest-free loans, tax breaks, government price-fixing, export mandates, etc.

Only then will we see a true, free market price of sugar that honestly represents actual production cost.  And only then will it makes sense for the U.S. to reconsider its own sugar policies.