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Right-Thinking Think Tank Thinking Wrong Sugar

In a recent column, Darren Bakst and Bryan Riley of the Heritage Foundation pooh-pooh a resolution by Rep. Ted Yoho (R-Florida) which calls for zeroing out the U.S. sugar program in simultaneous return for other nations zeroing out their sugar subsidy programs. The authors refer to Yoho’s “zero-for-zero” proposal as a “flawed” “scheme” that has no chance to work.

“Subsidies are bad policy regardless of what other countries do,” Bakst writes. “The U.S. sugar program is no exception.”

As such, Bakst calls for unilateral disarmament; eliminating the U.S. sugar program with no similar government hands-off actions from our global competitors – a strategy roundly rejected by President Ronald Reagan as it applied to nuclear weapons during the Cold War.

Bakst and Riley seem to overlook that we live in the real world, not Nirvana. For example…

In Brazil last week, left-wing President Dilma Rousseff was narrowly re-elected, thus assuring a continuation of massive government subsidies totaling billions of dollars, both direct and indirect, for her nation’s sugar industry, which controls some 50% of the global market.

Meanwhile, the Economic Times reports that sugar mills in India have essentially threatened to go on strike and not begin processing cane this season because they “suffered huge losses during last season on account of high cane prices fixed by the state and lower (profits) from sugar sales.”

In fact, while the government-mandated price for cane has increased some 65% over the last five years, the price for refined sugar has dropped 2% in the same time frame. Not exactly free-market government policies.

On the other hand, there’s this week’s hoped-for resolution in the “Sugar War” between the United States and Mexico relating to unfair Mexican pricing and government subsidies under the NAFTA treaty.

If adopted, reports, “the agreements create mechanisms to ensure that unfairly traded imports of Mexican sugar do not cause injury to U.S. sugar producers.”

Such an agreement clearly shows that Baskt and Riley’s assertion that Yoho’s “zero-for-zero” plan won’t work is just plain wrong. In reality, when the U.S. steadfastly defends its sugar industry against unfair trade practices and government subsidies, other countries will, indeed, reconsider their policies.

The Heritage Foundation is a great conservative think tank, but not infallible. Indeed, it was wrong in supporting RomneyCare years ago – the precursor to ObamaCare.  And it’s wrong again now to oppose Zero-for-Zero without even giving it a chance.