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Quick Hits from the Not-so-Free Market

  • The U.S. Department of Agriculture estimated in November that the global glut of sugar for the 2013-14 growing season will jump to a record-high 43.4 million tons, depressing sugar prices worldwide and resulting in even more aggressive government subsidies in foreign countries to prop up their domestic farmers.
  • In response to passage of the latest Farm Bill, Jim Simon of the American Sugar Cane League said: “At little or no cost to taxpayers, the sugar provisions in the 2014 Farm Bill give our industry a fighting chance to survive against subsidized foreign producers while providing the kind of stability that bankers need to be able to continue to underwrite (Louisiana’s) 483 family farming operations and 11 raw sugar factories and two refineries.”
  • Billy Gunn in The Advocate writes, “Louisiana’s sugar cane industry can only hope Mexico keeps its word in 2014 and sells its surplus sugar outside the U.S., where 2.1 million tons of Mexican sugar in 2013 sent American sugar prices to record lows and made it tough for farmers to make a living.”
  • Gunn adds: “In addition to Mexico, farmers in countries such as Brazil, Thailand and India rely on their governments to step in and save them when they produce too much.  The burden for the U.S. farmers is to try to stay afloat.”
  • Jack Roney of the American Sugar Alliance notes that “Mexico’s abundance of sugar comes from a flawed system in that country, a system that does not adhere to supply and demand laws and which encourages the government to take over sugar cane farms that are on the brink of financial ruin.”
  • “2013 was the first time since 2002 that U.S. sugar producers were forced to forfeit their sugar,” reports, quoting a sugar industry official who explained that “the forfeitures were not caused by overproduction in the domestic sugar market but by the North American Free Trade Agreement that allows Mexico unlimited access to the U.S. market.”
  • THE LAST WORD: “We’re all about free markets.  We would love for there to be nothing but free-market-traded sugar.  But that would mean that all of the other producing countries would have to drop their subsidies before we stop ours.  We’re not going to unilaterally disarm and put our growers at risk of trying to compete against the government of Mexico, the government of Brazil, the Indian government.”