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Making a Sugar Mountain Out of a Sugar Molehill

(Chuck Muth) – A recent article by John Beghin on behalf of the American Enterprise Institute resurrects old and debunked arguments for eliminating the current U.S. sugar program of limited tariffs and targeted import quotas.

He starts off with the time-worn claim that domestic sugar prices are “around twice the level of world prices” and refers to U.S. sugar policy as a “protectionist scheme.”

No, it’s not.  It’s a field-leveling policy in response to certain international competitors subsidizing their own home-grown sugar industries; subsidies that artificially keep prices below market value, often below even the actual cost of production.

To which Beghin counters: “One can hardly justify keeping the US sugar program because of distortions elsewhere in sugar markets.”

Yes, one can.  If the other team is “cheating,” one can absolutely justify taking steps to eliminate such an unfair advantage.

Beghin also fails to acknowledge that the price of American produced sugar today sells for about the same price it did 30 years ago.  So if the cost of sugar-infused foods, cookies, cakes, candies and sodas have gone up – and they have – don’t blame the cost of Made-in-the-USA sugar.

Beghin then tries to tar the sugar program as a cost to taxpayers.  But in his column, he, himself, admits the program is “administered by the USDA, mostly at no budgetary cost (my emphasis) to the federal government.”

To rationalize his taxpayer argument, Beghin claims higher prices are “implicit taxes” on “millions of families.”  But he again undercuts his own argument by admitting the supposed hit is “small (about $10 per person).”

Ten…dollars?  That’s what all this hyperventilating is about?  Talk about making a mountain out of a molehill.  Americans lose more than that these days every time they fill up.

In conclusion, Beghin dismisses arguments “that removing the sugar program will hurt American workers.”

“That is patently incorrect,” he declares.  But again, he undercuts his own argument by admitting that “Removing the sugar program will indeed penalize a small number of farmers.”

Of course, “small” is relative.

If you’re one of the farmers who loses his farm because Big Candy succeeds in getting Congress to allow unlimited, artificially cheap, foreign-subsidized sugar to flood the American market, you won’t think it’s such a “small” penalty to pay.

Mr. Beghin and his allies should spend less time and energy trying to kill the U.S. sugar program and instead pressure foreign governments to stop propping up their sugar industries with unfair, if not unlawful, subsidies.

Then we can get to a true global free market.