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Brazil, Hawaii, Mother Nature and U.S. Sugar Policy

Critics of the U.S. sugar program – a very successful, balanced system of targeted tariffs and import quotas designed to combat artificially cheap, government-subsidized foreign sugar – are unconcerned that massive “dumping” of such sugar could destroy our domestic sugar industry.

Their argument is that U.S. consumers would benefit from lower costs thanks to cheaper imports if such imports were allowed to flood our market.  But that view is very short-sighted and relies on an expectation that nothing will go hinky in the global market in the future.

First, anyone who doesn’t think opening the floodgates to government-subsidized sugar imports would take wrecking ball to our domestic market need only look west to Hawaii, where the once thriving sugar industry closed its last cane operation earlier this year.

And once such cane fields are blanketed with asphalt, housing, office parks and shopping centers, they aren’t ever coming back.

Secondly, it has been demonstrated over and over again that while the cost of a pound of U.S. sugar today is almost exactly the same price it was some 30 years ago, the cost of candy bars and other sweets have skyrocketed over that same period of time.

Just because Big Candy might be allowed to buy slightly cheaper sugar from the world market doesn’t mean for a second the American consumer will benefit from the savings.

And lastly, just because sugar from foreign sources might be a little cheaper (before including the cost of shipping) today, doesn’t mean it’ll remain such a bargain in the future.  Mother Nature can and does have a tendency to wreck havoc on agriculture on a regular basis – including regular periods of drought.

Then there’s also government unrest.  Consider this recent wire service report out of Brazil – the “OPEC of Sugar” and the world’s #1 producer…

“Protestors lit buses on fire, blocked roads and clashed with police on Friday during a general strike that brought transportation to a halt in many cities across Latin America’s largest nation. 

“The strike was a raw display of anger by many Brazilians fed up with corruption and worried about the future amid a deep recession and rising unemployment. . . . Millions stayed home, either in support of the strike or simply because they were unable to get to work.”

Does anyone really want to risk the cost of their M&M’s and Tootsie Rolls on the stability, or lack thereof, of third-world foreign governments if the rest of the U.S. sugar industry goes the way of Hawaii’s?

The current U.S. policy may not be ideal.  But we don’t live in an ideal world.  Unless or until other nation’s stop “cheating” by subsidizing their sugar industries, the current U.S. policy is both reasonable and prudent.