Unlike Hoover Dam, Big Candy’s Argument Doesn’t Hold Water

(Chuck Muth) – John Downs, chief DC lobbyist for Big Candy USA, recently authored an op-ed, published by the Orlando Sentinel, in which he called for ending the U.S. sugar program based on false and misleading arguments.  Par for the course.

Mr. Downs claims that because of the U.S. sugar program – consisting of comparatively minor import quotas and tariffs – “the U.S. has some of the highest sugar prices of any major market in the world.”

In making this claim; however, Mr. Downs conveniently omits critically important facts, including…

1.)  The cost of sugar today in the United States is almost EXACTLY the same cost as sugar in the United States some thirty years ago.  Meanwhile, the cost of candy and other sweets have skyrocketed.  Clearly it’s not the cost of sugar that is responsible for these enormous price hikes to consumers.

2.)  One of the reasons sugar in other countries is listed as lower than the U.S. price is that many foreign competitors provide direct government subsidies to their sugar industries, misleadingly resulting in artificially cheap sugar prices.

3.)  The oft-quoted “world price” for sugar from these countries does not include the cost of shipping to the U.S., meaning Mr. Downs is comparing apples to oranges.

Responsible reformers of the U.S. sugar program have proposed a simple, common-sense approach: Zero-for-Zero – essentially meaning we’ll zero out our program of reasonable protections of our domestic sugar industry when foreign competitors zero out their unfair government subsidies of their own sugar industries – which Mr. Downs dismisses out of hand.

Mr. Downs’ approach could permanently destroy America’s domestic sugar industry and leave the U.S. vulnerable to government unrest and additional market manipulations by foreign nations.

In fact, Brazil – the world’s #1 sugar producer and “OPEC of Sugar” – is currently considering the implementation of an import quota and 20 percent tariff on U.S. ethanol to further prop up its domestic sugar market despite the fact that the U.S., as requested by Brazil, eliminated our own ethanol tariff in 2011.

So what we have here is a perfect example of what happens when the U.S. “lowers its shields” and drops its defenses without a similar requirement on foreign trading partners.  Unilateral disarmament simply doesn’t work in the real world.

The fact is, as Judy Clayton Sanchez points out in a companion op-ed published by the Sentinel, the U.S. sugar program “regularly operates at zero cost, does not include government subsidy checks to farmers, and supports more than 142,000 American jobs in 22 states as part of an industry that contributes $20 billion per year to the U.S. economy.”

Congress should heed this age-old wisdom: When something works, don’t fix it.