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Sugar Market Can’t be Totally Free Unless It’s Also Fair

(June 10, 2013) – As a free-market conservative I have many concerns regarding U.S. sugar policies similar to those outlined in a recent column by George Will. However, when dealing with a global market one needs to consider the fact that not every player is playing by the same rules or on a level playing field. As such, it is in our nation’s public policy interest to ensure that international trade be not just free, but fair.

While it’s true the price of high-quality sugar produced in the U.S. is a bit higher than the world’s “dump” price, it’s not because of taxpayer-funded subsidies to sugar farmers. Indeed, an often overlooked fact in the debate over this year’s farm bill is that there are no taxpayer-funded subsidies being paid to American sugar farmers.

None. Nada. Zero. Zip.

And while current U.S. sugar policies are not costing American taxpayers a dime, Mr. Will complains that tariffs and quotas on foreign imported sugar are “raising the price of every edible thing, from ketchup to bread to yogurt, that contains sugar.”

But what Mr. Will neglects to mention is that, according to Prof. Michael K. Wohlgenant at North Carolina State University, we’re talking about a “small added cost per person per year of less than ten dollars.” That’s less than 83-cents per month; hardly a molehill let alone a mountain – especially compared to the average American’s tax burden!

And while the price of non-subsidized U.S. sugar may be a bit higher than the price of subsidized foreign sugar, the cost of U.S. sugar today is actually less than it was way back during the Reagan years. And yet, the cost of candy, cakes and other foods containing sugar has skyrocketed.

As such, it’s just silly to suggest that “manufacturers of candy and products with significant sugar content move jobs to countries where they can pay the much-lower world price for sugar.” Instead, it is more reasonable to suggest that sugar-related manufactures are moving operations overseas for the same reasons as other manufacturers: To avoid costly, anti-competitive U.S. employment policies and wages, combined with ever-increasing, anti-business government regulations, ObamaCare and taxes.

Indeed, if Mr. Will is truly interested in ending the current sugar program, he would embrace what is being called the “zero-for-zero” strategy in which U.S. sugar producers would support zeroing out import quotas and tariffs in exchange for foreign governments zeroing out global subsidies – including the direct cash payments some are providing to prop up their inefficient producers.

Such a policy – supported by card-carrying conservatives such as Sen. Marco Rubio (R-FL) – would result not just in a free market sugar trade, but a fair one, as well.