Tag: Sugar Industry

  • Farm votes will matter in 2016

    Farm votes will matter in 2016

    Republicans must have to lay down a competitive agriculture policy to win the farm votes. (Image Courtesy: Wikimedia Commons)
    Republicans must have to lay down a competitive agriculture policy to win the farm votes. (Image Courtesy: Wikimedia Commons)

    (Rick Manning, NetRightDaily) – The nation’s political eyes are on Iowa, New Hampshire, and South Carolina for the beginning of the 2016 presidential selection process with the rural South and Texas following hot on their heels.  It is obvious that agriculture issues play a heavy role in the presidential nominating process, but these issues also are important come November.

    Toss up states like Ohio, North Carolina, Florida, and Minnesota have significant farm interests which can be the difference between being a Wikipedia footnote and living at 1600 Pennsylvania Avenue for four years.

    And a plethora of issues is on the table that demonstrates the chasm between rural concerns and the current Administration ranging from labor to environmental policy to tax policy.

    On the labor front, farmers remember attempts by the Labor Department to apply child labor laws to family farms, effectively prohibiting farm kids from doing what generations of farm kids have done before them, work on the family farm.  Putting 4H and FAA projects in jeopardy, the Daily Caller quoted Cherokee County Farm Bureau president Jeff Clark as decrying the since dropped Obama Labor regulation saying, “What would be more of a blow,” he said, “is not teaching our kids the values of working on a farm.”

    While this misguided attempt at destroying the family farm through Wage and Hour regulations was stopped, it serves as a grim reminder that our nation’s agricultural way of life is one Administration’s regulatory scheme away from being destroyed.

    On the environmental front, candidates are missing the boat if they are not hitting Obama regulations that impact everything from grazing lands and forestry to insect control to controlling every stream and puddle on the land through the EPA.

    Simply focusing upon the EPA’s Waters of the United States regulatory effort and reminding rural America that their property that in many cases has been in their family for generations is at risk of being overrun by EPA bureaucrats overseeing every use of water and the land around it.  WOTUS is so bad that the American Farm Bureau Federation has called it, “the biggest federal land grab – in terms of power over land use – that we’ve seen to date.”

    Another existential threat to the family farm’s survival as we know it, is the restoration of the death tax at a 50 percent rate.  The death tax guarantees that the generational transfer of farmland becomes more and more problematic as land rich, cash poor farming families are forced to either sell land to raise cash to pay Uncle Sam or borrow.  Any candidate discussing their tax plans needs to include the permanent elimination of the death tax to end the taxman’s grip on the property deeds of farm families.

    While there are many other regulatory and legislative assaults on the farming community one of the traditional conservative bugaboos that give the agriculture community pause is the persistent call to end farm supports, a position that is the right one philosophically but challenging politically.  It is a battle that conservatives have lost for fifty years, not because it isn’t right, but instead because it is a tactically stupid frontal assault on the very constituencies who provide the GOPs majority in Congress.

    Representative Ted Yoho (R-Fla.) has come up with a smarter way to both message about ending farm subsidies (in this case sugar) and actually accomplish the mission.  Called the zero for zero approach, Yoho would have Congress end sugar subsidies, but only once other nation’s which subsidize sugar much more aggressively end their programs.  Allowing U.S. trade negotiators to go into meetings with a new seriousness because Congress has already acted, gives them a strong hand in bringing nations like India and Brazil to a timetable for ending their price supports.  A positive approach to helping restore free market forces into the agriculture industry.

    Agriculture matters, and whoever wins the GOP nomination will need to dominate in the rural agriculture areas in key electoral states in order to win their electoral votes.  Now it is up to the Republican presidential field to lay down a smart, competitive agriculture policy that allows America’s most important industry to thrive as we move ahead into the uncharted waters post-Obama, so they can lay the groundwork to mobilize these constituencies like never before.

     

    Rick Manning is president of Americans for Limited Government.

    The column was originally published at NetRightDaily.com.

  • Big Candy’s Big Lie Campaign is Big-Time Propaganda

    Big Candy’s Big Lie Campaign is Big-Time Propaganda

    Clockwise from top left: White refined sugar, unrefined sugar, brown sugar, unprocessed cane sugar. (Courtesy: Wikimedia Commons)
    Clockwise from top left: White refined sugar, unrefined sugar, brown sugar, unprocessed cane sugar. (Courtesy: Wikimedia Commons)

    (Chuck Muth, Citizen Outreach) – A recent congressional briefing – sponsored by the Coalition for Sugar Reform, a front group funded primarily by the candy industry – succeeded wildly in perpetuating a modern-day version of The Big Lie.

    “Americans are paying twice as much as they should be for sugar,” claims Guy Bentley in a recent article published by the Daily Caller.  “This hurts both the industries that use sugar, like candy manufacturers, and ordinary consumers in the form of higher prices in grocery stores.”

    Bentley went on to maintain that the U.S. sugar program, which “has been in effect for 75 years,” is responsible for the loss of some 127,000 American jobs from 1997 to 2011 “because companies were forced to pay an artificially high price for sugar.”

    Pravda’s editors would be quite proud of such propaganda.

    First, the cost of sugar in the U.S. isn’t artificially high.  The cost of sugar from foreign nations is artificially low, thanks to government subsidies that prop up their industries.

    Secondly, the cost of American sugar is not only a true free-market price, it’s about the same as it was three decades ago when Ronald Reagan was president.  As such, the sky-rocketing cost of a candy bar today is actually due to sky-rocketing taxes, sky-rocketing wages and benefits, and the cost of sky-rocketing government regulations and mandates.

    Bentley went on to assert that in 2013 “the direct cost to taxpayers of the sugar program soared to $300 million because the Department of Agriculture was forced to buy up surplus sugar and remove it from the market to prop up sugar prices.”

    And now, as Paul Harvey was wont to say, the rest of the story…

    The anomaly in 2013 was due entirely to the Mexican government – which actually owns a piece of its sugar industry – abusing the NAFTA trade agreement to “dump” artificially cheap, government-subsidized sugar into the U.S. in an effort to collapse our own domestic market.

    What happened next is what needs to happen globally in order to get rid of the U.S. sugar program.

    U.S. and Mexican negotiators got together and hammered out a deal that struck a balance between the competing interests of the trading partners.  It’s the sort of deal that not only assures a freer market, but a fairer one, as well.

    Congress should follow this example and pursue Rep. Ted Yoho’s “zero-for-zero” proposal in which the U.S. will eliminate its sugar program in return for other global competitors simultaneously eliminating theirs.  At which point Big Candy would no longer have need for their Big Lie campaign.

     

    Chuck Muth is president of Citizen Outreach and the publisher of www.NevadaNewsandViews.com.  He personally blogs at www.MuthsTruths.com.

  • Indian Sugar Program “Helping” Farmers to Death

    Indian Sugar Program “Helping” Farmers to Death

    sugar 5

    Chuck Muth(Chuck Muth, Citizen Outreach) – If you think the U.S. sugar program is bad, you should take a look at the sugar industry mess in India.

    At least in the U.S. you don’t have farmers committing suicide over government agricultural policies.

    According to a recent Business Standard report, the Bharatiya Janata Party (BJP) is planning a ‘Raita Chaitanya Yatre’ (farmer’s rally) to “pressure the state government to address problems being faced by farmers in the state and provide immediate help to them.”

    Nalin Kumar Kateel MP said last month that the rally’s purpose “was to wake the state government ‘out of slumber’ on the issues of farmers.”

    “Many farmers in the state,” Kateel noted, “especially sugarcane farmers, have committed suicide in the last few months burdened with loans as their crops failed due to drought.”

    Indeed, according to an October 18 article in The Hindu, Maruti Manpade, president of the Karnataka Pranta Raitha Sangha (KRRS), a farmer’s movement, said the government’s importation of sugar “was one of the reasons for the suicide of sugarcane growers in the State.”

    “While farmers are in distress following the crash in the price of sugar, the BJP’s State unit is holding rallies against the Congress government,” Manpade told the paper. “Instead of playing petty politics and shedding crocodile tears for farmers, [the BJP should] do something to help the farmers.”

    Manpade went on to accuse the government “of not forming an alternative agriculture policy for helping farmers” and “said that the visit of Congress vice-president Rahul Gandhi to the State would not prevent farmers from committing suicide but a comprehensive alternative farming policy would.”

    Of course, it’s well-intentioned but ill-advised government programs designed to help farmers that are causing the problems in the first place.

    Which brings to mind something Ronald Reagan famously once said…

    “The nine most terrifying words in the English language are: I’m from the government and I’m here to help.”

    When it comes to agricultural policies, the best way for the governments of both India and the United States to “help” is to simply stop helping.

     

    Mr. Muth is president of Citizen Outreach and the publisher of www.NevadaNewsandViews.com.  He personally blogs at www.MuthsTruths.com.

  • Ag Committee Hearing: Foreign Subsidies Jeopardizing Free Trade and Harming American Farmers

    Ag Committee Hearing: Foreign Subsidies Jeopardizing Free Trade and Harming American Farmers

    Chuck Muth(Chuck Muth, Citizen Outreach) – The House Committee on Agriculture conducted a hearing on October 21 exploring how foreign government meddling in various agricultural markets was hurting U.S. farmers while making a mockery of the notion of “free trade.”

    In opening remarks, Committee Chairman K. Michael Conaway noted that when it comes to government subsidies, “in many cases what foreign countries are doing is patently illegal under their World Trade Organization commitments.”

    “Our government,” Conaway declared, “must begin to take on those who are cheating on their trade commitments.  These actions by our foreign competitors are undermining our trade agenda and, as we will hear in testimony today, cheating by foreign countries is also causing serious injury to our nation’s farmers and ranchers.”

    Such “cheating” is especially pronounced in the global sugar market.

    Jack Roney, director of economics and policy analysis with the American Sugar Alliance, testified to the “tremendous distortion” in world sugar prices due largely to government “price protection” for foreign sugar farmers.  He further charged specifically that India was in violation of World Trade Organization (WTO) rules.

    In addition, the day before the hearing the U.S. International Trade Commission (ITC) “affirmed that Mexico’s sugar industry had harmed American producers by selling subsidized sugar onto the U.S. at below market prices – a practice known as ‘dumping’.” (Source: Agri-Pulse)

    The unanimous ruling “means that an agreement signed by the U.S. and Mexican governments to establish a trading structure that caps Mexican imports and stop Mexico’s abuses will remain in effect for at least five years,” according to the American Sugar Alliance.

    “U.S. sugar producers want NAFTA to operate as intended and to foster free and fair sugar trade between Mexico and the United States,” said Phillip Hayes, a spokesman for the U.S. sugar industry. The ITC ruling “helps accomplish that goal by upholding the governments’ agreement and addressing the unfair trade practices that were injuring American farmers, workers, and taxpayers.”

    “I hope that one day our trade agenda is able to zero out subsidies, tariffs, and other trade barriers around the world, including here at home,” Chairman Conaway concluded in his opening remarks at the congressional hearing.  “But, until that day becomes a reality, we cannot and we will not unilaterally disarm America’s farmers and ranchers.”

    What he said.

     

    Mr. Muth is president of Citizen Outreach and the publisher of www.NevadaNewsandViews.com.  He personally blogs at www.MuthsTruths.com.

  • TPP provides light at end of the sugar subsidy tunnel

    TPP provides light at end of the sugar subsidy tunnel

    Sugar 3

    Chuck Muth(Chuck Muth, Citizen Outreach) – Critics of Rep. Ted Yoho’s “Zero for Zero” resolution who say it can’t be done should heed the wisdom of getting out of the way of people already doing it.

    Z4Z – in which the United State would eliminate its sugar program of relatively minor import restrictions and tariffs in return for other nations simultaneously eliminating their own, far more aggressive direct subsidies to sugar famers and producers – needs to be negotiated.

    “Wishing” is not a realistic means to the end.

    An example of how this could, if Congress pursues such a course, resolve much of the world’s problem in the heavily distorted sugar market is the recently finalized Trans-Pacific Partnership (TPP) agreement.

    Under the agreement – with give and take on both sides – Hal Conick of Confectionery News notes that “Australia would be allowed to provide an additional 65,000 metric tons of sugar to the US” which will be duty free and with no quota tariff.

    “In addition,” Conick notes, “US export tariffs to Vietnam, which currently stand at 20%, will be eliminated by 2026.”  And Canada will be allowed to export “an additional 9,600 metric tons of refined beet sugar as part of the agreement.”

    While most U.S. sugar producers, given their druthers, would have probably preferred that things stay just the way they are, they accepted the deal because it wasn’t so egregious as to drive them out of business.  But that was the end goal of candy makers, who clearly wanted more.

    “Of course we wanted more, but this is what we’ve got,” said Rick Pasco, president of Sweetener Users Association (SUA).  “There will be future opportunities with trade agreements.”

    And that is exactly the point of Rep. Yoho’s Z4Z resolution.  Everything is and should be negotiable, including the subsidies of our trading partners.

    Rather than pursuing futile efforts to eliminate the U.S. sugar program unilaterally – leaving our domestic sugar industry vulnerable to a greatly distorted and artificially cheap global market – Congress should pursue trade agreements on sugar through the World Trade Organization (WTO) or other appropriate vehicles.

    It’s not a question of whether or not such agreements could be negotiated.

    It’s a question of whether or not policymakers are willing to stand up for America’s farmers and demand real subsidy reforms abroad.

    As TPP has shown, where there’s a will, there’s a way.

     

    Mr. Muth is president of Citizen Outreach and the publisher of www.NevadaNewsandViews.com.  He personally blogs at www.MuthsTruths.com.

  • End Global Subsidies to Lower Food Bills

    End Global Subsidies to Lower Food Bills

    Sugar (2)

    (Matthew Kandrach, 60 Plus Association) – Next to healthcare and medicine, no budget item hits seniors in the pocketbook more than food. While fixed incomes remain fixed, grocery bills do not, and receipts at the checkout counter are getting a lot bigger these days.

    Take the price of chocolate, one of life’s small pleasures, for example. The cost of a Hershey bar reached an all-time high $1.49 this year.

    It’s the exact same iconic candy bar that our parents grew up paying a nickel for in the ‘40s, ‘50s, and ‘60s. And since the 1980s, when a Hershey bar still only cost 35 cents, its price has regularly and rapidly increased.

    The fact that seniors’ dollars aren’t stretching quite as far in the candy aisle is not all Hershey’s fault. Confectioners are dealing with the same high taxes, out-of-control healthcare costs and regulatory burdens we’re all facing.

    But these international companies are dealing with the world’s most volatile commodity market, too. A global market that has been grossly manipulated by, you guessed it, government policies.

    World average sugar prices are all over the map, fluctuating over the past couple of decades from lows of 3 cents per pound to highs of more than 60 cents. This makes proper planning much harder for food companies that depend on sugar, which includes bread, sauces, drinks, canned foods, ready-made meals, and dozens of other food staples.

    So what can be done about it? Europe thought it had the answer in 2006 when it announced an end to its egregious sugar policies and urged others to follow suit.

    But the plan backfired. Europe acted in isolation without anyone else following its lead. The EU sugar industry was gutted, 120,000 people lost their jobs, dozens of factories were left in ruin and consumers were forced to pay more for sugar.

    Foreign suppliers — many of which are controlled by foreign governments — didn’t ship Europe enough sugar to meet its needs and food prices skyrocketed as a result. There were even press accounts of sugar rationing in some European stores.

    Europe responded with billions in bailouts, tariffs and a new subsidy package for farmers remaining in the industry. Those subsidies will soon reach $665 million a year and economists predict it will likely add unneeded sugar to the already topsy-turvy the global market.

    In other words, the EU government tried to correct a problem it helped create with more government largess that will ultimately make the underlying problem even worse.

    Europe isn’t alone, either. Other major sugar producers are ramping up subsidization. Brazil is busy bailing out its struggling industry in hopes of maintaining a stranglehold on global exports; Thailand has used more than $1 billion a year to boost its production; and India is intentionally breaking international trade rules with illegal subsidies meant to flood the market.

    The fact is, food manufacturers and grocery shoppers will never get a fair shake as long as governments are manipulating commodity markets. And no government will ever act as Europe did and unilaterally disarm in fear of the consequences.

    The only workable solution is a global cease-fire in subsidies. An accord where trade-distorting policies are outlawed and free markets can begin to form.

    Congressman Ted Yoho (R-Fla.) has a resolution, nicknamed the zero-for-zero sugar policy, which proposes to do just that. His idea is to target foreign sugar subsidies then roll back U.S. sugar policy as a means to achieve real global reform.

    It is not unilateral disarmament, which would ultimately lead to U.S. job loss and reward bad actors without addressing the problem. It is a less-government idea that puts a little bit of common sense back into global commodity market.

    That’s something all seniors should support the next time they suffer sticker shock at the grocery store.

     

    Matthew Kandrach is Vice-President of the 60 Plus Association. This column was originally published by NetRightDaily.com.

  • India’s Sugar Woes in an Imperfect Global Market

    India’s Sugar Woes in an Imperfect Global Market

    Sugar cane

    Chuck Muth(Chuck Muth, Citizen Outreach) – Well, here we go again…

    Those in Congress who believe in unicorns and a global free market in sugar need only take a look at this Reuters story, “Govt plans incentives for sugar mills to pay cane growers: sources,” published on Tuesday by the Business Standard in New Dehli…

    “The (Indian) government is likely to give incentives to sugar mills to pay cane growers, government and trade sources said on Tuesday, as part of efforts to help sugar companies saddled with large stocks and lower prices. ‘We are working out some sort of subsidy for mills so that farmers can be paid on time,’ a government source said.”

    Some…sort…of…subsidy. Doesn’t sound very “free market” to me.

    While in an ideal world the U.S. wouldn’t have a sugar program at all, the one we do have includes some relatively minor quotas and tariffs on imported sugar.

    But U.S. sugar farmers and sugar mills do NOT get direct government subsidies like those being mulled for Indian sugar farmers and mills – which will artificially lower the cost of Indian sugar and further exasperate the distorted global sugar market.

    In somewhat related news, Bloomberg reported that “Shree Renuka Sugars Ltd., the biggest Indian refiner, filed for bankruptcy protection in Brazil” this week.

    Seems the current global sugar glut – particularly bad in both India and Brazil – has driven down prices at the same time a drought in parts of both countries is threatening the current crops and future productions.

    This, too, should prove instructive to the Rose-Colored Glasses caucus on Capitol Hill.

    Sure, the cost of global sugar outside the U.S. is cheap today.

    But if unfettered access of cheap sugar to the U.S. market today resulted in a crippling or death of our domestic sugar industry tomorrow (see, “Shree Renuka Sugars, Ltd.”), what would happen to those sugar prices when unforeseen circumstances – like drought – wipe out artificially cheap sugar imports and replace them with sky-high sugar imports?

    Can you imagine the cost of Oreos and Hershey bars when U.S. consumers are left at the mercy of manipulative foreign governments once they get unrestricted access to our domestic market and destroy the U.S. sugar industry?

    The U.S. sugar program isn’t ideal for a perfect world.

    But it’s the best we’ve got in the imperfect world we actually live in.

     

    Mr. Muth is president of Citizen Outreach and the publisher of www.NevadaNewsandViews.com. He personally blogs at www.MuthsTruths.com.

  • India’s Sugar Export Policy is “Almost Criminal”

    India’s Sugar Export Policy is “Almost Criminal”

    India's sugar plantation is ranked second in world's sugar industry.
    India’s sugar plantation is ranked second in world’s sugar industry.

    Chuck Muth(Chuck Muth, Citizen Outreach) –  India is the world’s second largest producer of sugar, behind only Brazil.  Its sugar industry is also a basket case.

    Let’s start with the fact that growing sugar requires huge amounts of water.  Indeed, according to a column this week by Ajit Ranade in the Pune Mirror, sugar crops in Maharashtra take up “3 percent of arable land, but consume more than 60 percent of the water.”

    Now, add in the fact that certain sugar-producing regions in India are suffering from a second year of crippling drought.  Indeed, a prime government objective in some parts is “tanker mukt” – meaning free of water tankers being required to deliver drinking water.

    Nevertheless, India as a whole is drowning in the crop.

    “The glut of sugar,” Ranade writes, “if not exported, will cause domestic prices to collapse.  Which would lead to massive losses for sugar factories that are already in the red.  This in turn means the factories will not be able to pay the sugarcane farmers.”

    That would add insult to injury, as “there are huge payments overdue to farmers” already.  As such, courts are mandating that factories pay farmers their arrears with money they don’t have.

    It’s become a major fiscal problem, Ranade notes, because “the central and state governments have to draw money from the general treasury (i.e. taxpayer collections) to bail out sugar factories so that sugarcane farmers can be paid.”

    To offset the subsidies from the government, the government is pushing for exports at a time when “the international prices are trending lower and sugar prices are almost 35 per cent lower than last year.”  Meaning, India will “have to export larger and larger quantities to make up the same earnings in dollars.”

    “If you factor in the drought situation,” Ranade concludes, “where humans and cattle are thirsting for drinking water, this export policy seems almost criminal.”

    Yet, the Indian government stubbornly refuses to discourage sugarcane production.

    This is the global “free market” that some in Congress want U.S. sugar producers to compete in without the minimal protection of import quotas on countries such as India where government meddling and manipulation have produced artificially lower prices rather than true free market prices.

    As messed up as India’s sugar industry is, why on earth would anyone in Congress want to throw our high-producing/subsidy-free sugar farmers to such government subsidized wolves?

     

    Mr. Muth is president of Citizen Outreach and the publisher of www.NevadaNewsandViews.com.  He personally blogs at www.MuthsTruths.com.

  • Donald Trump and the U.S. Sugar Program

    Donald Trump and the U.S. Sugar Program

    Sugar and sugar cane Chuck Muth(Chuck Muth, Citizen Outreach) – A serious drought in India could result in the nation’s sugar farmers getting the short end of the stick in order to direct dam and canal water to people and animals, the Indian Express reports.

    “It is high time mill owners explored modern technology to minimise the use of water during plantation and crushing,” declared former Congress minister and sugar mill owner Harshvardhan Patil.

    Ah, but there’s the rub.  Such modernization will cost money.  And India’s sugar industry is struggling with low prices right now and doesn’t have extra capital laying around for infrastructure improvements.

    In fact, the industry has been bailed out multiple times by the government in recent years, which has only further depressed global prices to low levels that barely cover half the cost of production.

    To really fix the problem, India needs prices that actually reflect production costs, but that means India will lose out to lower-cost, more efficient competitors like Brazil, Thailand, Australia, and maybe even the United States.

    Indeed, American sugar farmers are already among the most efficient sugar farmers on the planet. Which means the problem isn’t that the cost of U.S. sugar is too high – especially considering the fact that the cost of a pound of U.S. sugar today is right around where it was 30 years ago.

    No, from a free market standpoint the cost of U.S. sugar is probably just about right.  It’s the government subsidies to less efficient foreign sugar producers that is warping the global price of sugar and artificially driving it down.

    Without those government crutches, U.S. sugar farmers can not only compete with, but beat any and all foreign competitors.  It’s the foreign government subsidies that are the problem, not the U.S. sugar program of limited quotas and tariffs on imported sugar.

    By the way, this situation is neither new nor constrained to sugar.  In a recently uncovered 1988 interview of Donald Trump by Oprah Winfrey, Trump criticized U.S. foreign trade policies…

    “We let Japan come in and dump everything into our markets,” Trump said.  “It’s not free trade. If you go to Japan right now and try to sell something, forget about it, Oprah.  Just forget about it.  It’s almost impossible.  They don’t have laws against it. They just make it impossible.”

    The same could be said today about the sugar market, where subsidies and government manipulation reign supreme.

    If you want a market of free-flowing sugar where prices respond to supply and demand conditions and reflect costs of production, forget about it.  Just forget about it.  It’s almost impossible because of foreign governments.  It’s not free trade.

    If you want free global trade in sugar, then every sugar producing nation needs to go cold turkey on subsidizing their sugar industries, or the U.S. really has no choice other than to protect our national interests by limiting their access to our markets.

     

    Mr. Muth is president of Citizen Outreach and the publisher of www.NevadaNewsandViews.com.  He personally blogs at www.MuthsTruths.com.

  • Unable to Beat Sugar Meddlers, Nigeria Joins Them

    Unable to Beat Sugar Meddlers, Nigeria Joins Them

    Sugar has been regarded as a strategic product by countries all over the world.
    Sugar has been regarded as a strategic product by countries all over the world.

    Chuck Muth(Chuck Muth, Citizen Outreach) – When most Americans hear “Nigeria,” what usually comes first to mind is “email bank scam.”

    But in an article published last week by This Day Live, Abdullahi Yunusa weighed in with some very interesting observations about the global sugar market and Nigeria’s national and economic interests.

    Indeed, Yunusa warned that “The sugar industry is too important a sector to be neglected.”

    But not just for Nigeria.  As Yunusa points out, “sugar is regarded as a strategic product” by countries all over the world…

    “The raison d’etre for investment in sugar production stems from its potential to generate employment in the hundreds of thousands, save foreign exchange, enhance rural industrialization, create wealth and alleviate poverty. It is equally important to stress that the use of sugar is widespread and covers both domestic and industrial applications, such in the pharmaceuticals, confectionery, soft drinks, breweries, dairies, bakeries etc.”

    This, in addition to sugar’s use in some energy production.

    Noting how critical sugar is to “national food security,” Yunusa outlined “stringent fiscal measures” that other countries have put in place to protect their domestic industries, including some minor tariffs and import quotas that make up the U.S. sugar program.

    “India,” Yunusa writes, “doesn’t allow the export of a grain of sugar until after Diwalli Festival, even in surplus years; this is to ensure food security and prevent social upheaval.”  The government also “fixes prices at which sugarcane and sugar is sold in the domestic market.”

    For its part, Brazil also “strictly regulates” its sugar industry and is eyeing a new export tax on ethanol “to boost local supplies and stabilize prices.”

    And “Sugar-producing countries like Pakistan and Indonesia have also put into place stringent measures that will protect their economies.”

    With the rest of the world setting such a bad example, is it any wonder that Nigeria – which imports some 95 percent of its sugar – is not only eyeing expansion of its own sugar industry, but expanding the government’s meddling in that industry, as well?

    Indeed, to protect local sugar farmers the Nigerian government recently “opted to increase the tariff on imported sugar as a way of discouraging imports.”  New rates “between 50%-80%” were approved.

    Recognizing that there’s no “free market” in global sugar, Nigeria has apparently decided that if you can’t beat them, join them.  And such government interference in the sugar market – for new and old players alike – will continue until all parties somehow come together and agree to disarm unilaterally.

     

    Mr. Muth is president of Citizen Outreach and the publisher of www.NevadaNewsandViews.com.  He personally blogs at www.MuthsTruths.com.