To Top

Study: A Third Way on Sugar

Americans for Limited Government Foundation released “The Case for a Zero for Zero Sugar Policy in the United States” by Dr. Mark Hartley of the College of Charleston examining the much debated and highly controversial United States sugar policy.

Dr. Hartley, a Professor of Business and Carolina/Virginia Chair in Supply Management School of Business, finds common ground in the arguments of both proponents and opponents of current policy around free market arguments writing, “Both sides have publicly embraced the concept of a free market. A true free market could eliminate U.S. protectionist policies, thus helping consumers, and ensure a strong domestic supply for years to come. Both sides believe that subsidies are detrimental to the sugar trade market. And certainly both sides agree that domestic production is important to ensuring food safety and high quality standards.”

Richard Manning, Vice President of Public Policy and Communications for Americans for Limited Government Foundation, notes, “the contentious debate has always centered on how to achieve a true free market ideal, and Dr. Hartley threads that needle in this just released paper.” Hartley identifies the “zero for zero” sugar policy model as the “true free market approach.”

Championed by U.S. Congressman Ted Yoho (R-Fla.), under zero for zero U.S. officials would push for zero subsidies abroad while using the promise of zero subsidies at home as incentive. The proposal would lift restrictions and tariffs uniformly between all nations that produce sugar in the global market.

Hartley concludes that, “As proposed, a zero for zero sugar policy would lift restrictions and tariffs on trade between all players in the global sugar market and would target market-distorting policies, including direct and indirect subsidies.”

However, the zero for zero solution is not easily accomplished, with more than 100 sugar producing countries worldwide with 100 different sugar policies.

Anticipating this dilemma, Hartley points to the World Trade Organization as the only place where the world’s varying trade/subsidy sugar policies can be brought to heel.

With Brazil now controlling more than half of the world’s sugar export market, Hartley notes Brazilian dominance in the market is through “essentially complete government subsidization, any worldwide free market approach to sugar policy must include their participation.”

In fact, Brazil’s latest federal budget includes higher subsidies for their sugar industry than last year.

Hartley recognizes this reality concluding that, “The WTO is unquestionably the only entity that can deal with all sugar subsidies in all countries at the same time. And if Brazil or other top producers refuse to participate via WTO pressure, the existing tariffs on foreign subsidized sugar imported to the U.S. market should remain in place, although this option is clearly not the preferred approach.”

(Dr. Mark Hartley has published over 100 articles covering a wide variety of topics focusing on business operations in refereed academic journals, conference proceedings and professional trade publications, and is a frequent speaker and contributor to groups such as the Institute for Supply Management and the Decision Sciences Institute. He is a Member of the South Carolina Procurement Review Panel, served on the Governor’s Commission on Management, Accountability, and Performance (MAP Commission), and later as Chairman of Charleston County’s MAP Commission.)