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Sugar and the Brazilian Man March

While I may not be an economist, I can understand news reports written in plain English about what Brazil is doing to mess with the world sugar market, as well as reports on the “Salad Uprising” currently threatening the government of former Marxist guerilla Dilma Vana Rousseff.

By some estimates more than a million Brazilians have taken to the streets recently to protest government policies, corruption, bad services and even hikes in bus fares. And as this civilian unrest continues to simmer and grow, Rousseff’s socialist government has reportedly dumped an additional $500 million into its already bloated $2.5 billion worth of subsidies to prop up the nation’s sugar industry.

Not surprisingly, this resulted in a 39% jump in Brazilian sugar exports last month, further flooding an already-oversaturated market and further distorting artificially-reduced world sugar prices. Indeed, global sugar prices were already down some 17% for the year even before Brazil’s latest “sugar dump.”

Fortunately for American sugar farmers, import quotas are in place to protect them from Brazil’s Soviet-style command-and-control sugar program, though such policies admittedly aren’t the ideal situation for those of us who favor a free and open market on goods and services, including sugar. Something needs to be done.

Hello, Congress?

Lawmakers seem unlikely to pass a new farm bill. As such, alternatives and options are now back on the table. And one of those options is a resolution (HCR 39) introduced by Rep. Ted Yoho, with bi-partisan support, which calls on the Obama administration to pursue a “zero-for-zero” strategy to eliminate government meddling – ALL government meddling – in the global sugar market.

Yoho’s resolution expresses the sense of Congress “that all direct and indirect subsidies that benefit the production or export of sugar by all major sugar producing and consuming countries should be eliminated.” Who can argue with that?

Adoption of Yoho’s strategy would include the elimination of import quotas and tariffs which currently protect U.S. sugar farmers. But only if countries such as Brazil agree to simultaneously stop being their own farmers’ sugar daddy. Mutual disengagement.

There’s no reason for Congress to throw American farmers to the wolves just to help Brazil’s president continue her march towards a socialist paradise that simply doesn’t exist – as millions of Brazilians in the street can attest.