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Sugar’s “Free Market” at Work

How do you boost the cost of sugar in India without boosting the cost of sugar in India?

Simple.  If you’re the Indian government you jack up the cost of government-mandated ethanol, and sugar prices will zoom to the moon on their own.

In what the Economic Times characterized as a “bonanza for sugar mills,” the Indian government this week fixed the price of ethanol at a rate “much higher than the price oil companies presently pay to buy the sugarcane extract.”

As a result, the cost for Indian sugar has soared anywhere from 2.69 percent to 12.79 percent at mills around the country.

This just a week after the Deccan Chronicle reported that the “sugarcane crisis” which virtually brought the government in Belagavi, India “to its knees during last year’s session” had returned, “ensuring that proceedings in both Houses of the legislature were crippled on Tuesday, the first day of the session.”

The publication noted that “legislators tore into the government for failing to make the rich sugar factory owners” pay a higher-than-market price to cane growers.  It also recalled how “a debt-ridden sugarcane grower had committed suicide” last year, “triggering outrage among farmers across the state and forcing the government to” raise the fixed price for sugar.

Alas, many of the factory owners are also powerful politicians who have refused to pay the government-mandated price to the farmers.

In other non-related “free market” sugar news, The Guardian reports that “Cambodia’s booming sugarcane industry – which benefits from a preferential EU trade scheme called the Everything But Arms treaty – is rife with allegations of human rights abuses, among them illegal land grabs, forced displacement and child labour.”

Cambodian villagers report “being subjected to physical violence, having their homes and property destroyed (and) their land confiscated without their consent” by a sugarcane plantation conglomerate out of Thailand.  All a result of the duty-free agreement the European Union has for Cambodian sugar.

And this is the “free market” some in Congress here in the U.S. want U.S. farmers to compete in without a net?