Tag: Sugar Program

(Chuck Mutch, Citizen Outreach) – In a recent Daily Signal column, Bryan Riley was in near hysteria over the loss of 600 jobs baking Oreo cookies in Chicago after Nabisco announced it was moving its manufacturing operation to Mexico.  According to Riley, the decision was directly related to the current U.S. sugar program of relatively minor import tariffs and quotas.

“The leading ingredient in Oreos is sugar,” Riley wrote, “and U.S. trade barriers currently require Americans to pay twice the average world prices for sugar.”

As such, Riley continued, “Sugar-using industries now have a big incentive to relocate from the United States to countries where access to their primary ingredient is not restricted.”  He went on to claim that the “obvious connection between the lost jobs and sugar quotas was missed by many observers.”

Well, to the extent it was missed, it’s because it isn’t there.

The fact is a pound of sugar today costs almost the same as it did in 1984 – way back when Ronald Reagan was president.  And after doing a little checking at FoodTimeline.org, I learned that in 1984, the cost of a 20-ounce package of Oreos cost $1.79.  Today, a 14.3-ounce bag of Oreos costs $4.49.

So, the price of a bag of Oreos today costs more than twice what it cost back in 1984 – and for a smaller bag! – while the cost of the sugar itself in those cookies costs pretty much the same.

Clearly, it is NOT the cost of sugar that has driven up the price of Oreos or driven Nabisco out of Chicago.  In fact, Nabisco’s move from the U.S. to Mexico has nothing whatsoever to do with the cost of sugar in Chicago.  It’s the cost of labor in Mexico.

The Chicago Tribune reported that the bakery was being relocated “because the three unions that represent workers either did not make a proposal to keep the work or their concession packages were inadequate.”

Laurie Guzzinati, a spokeswoman for the company, explained that there was a “$46 million gap between the cost of operating in Chicago and in Mexico” and that the unions representing the workers “did not provide a measurably impactful way to close the gap.”

Look, I have no problem with folks such as Mr. Riley criticizing the U.S. sugar program.  I criticize it myself.  But it is intellectually dishonest – when you look at the facts – to blame the U.S. sugar program for the decision of a cookie-maker to relocate its manufacturing operation from Chicago to Mexico.

It’s just not true.  The facts speak for themselves.  You could look it up.

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

(Chuck Muth, Citizen Outreach) – I understand why free market advocates are opposed to the U.S. sugar program of modest tariffs and import quotas that don’t cost taxpayers a dime.  I’m a free marketer myself and want the sugar program to go away, as well.

However, I live on Planet Reality, not Planet Nirvana. And the reality is we now live in a global economy and you can’t have a free market when your competitors are playing with corked bats.

And it does the debate no good when opponents use false and misleading arguments to buttress their case.  For example…

In a recent column, Leslie Paige of Citizens Against Government Waste claimed American consumers are paying for the sugar program “through a hidden tax on sugar-containing products – including everyday staples like bread, pasta and peanut butter – that are more expensive as a result of the high cost of sugar in the United States.”

But that claim is simply and demonstrably not true.

The fact is, the cost of a pound of sugar in the U.S. today – though arguably higher than some other countries whose governments provide generous and direct subsidies that distort the true cost – is right about where the cost of a pound of sugar was 30 years ago.

On the other hand, the cost of, for example, of a Hershey’s chocolate bar is now more than THREE TIMES the cost of Hershey’s chocolate bar 30 years ago.

Clearly it’s not a “hidden tax on sugar-containing products” that’s driven the cost of a Snickers through the roof.

Here on Planet Reality it’s the rising cost of not-so-hidden government taxation and regulation, with a healthy side order of profit-taking, that has resulted in Oreos costing more on supermarket shelves.

And, let’s not forget the hidden costs of skyrocketing wages and mandated benefits on the American labor force.  How else but raising prices are U.S. manufacturers, including candy manufacturers, supposed to pay for minimum wage hikes now moving into the $15-per-hour-range?

No, the way to eliminate the U.S. sugar program isn’t to fall for the false argument that the cost of domestic sugar is responsible for soaring food prices, but to persuade other sugar-producing nations to eliminate their market-distorting subsidies for their own sugar industries so that a global free market can truly be free.

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