The result, as the Washington Post's Hobart Rowen wrote at the time, was a policy that would "Simply transfer the burden of protecting domestic sugar interests to consumers from the government, making a mockery of the Reagan propaganda line that he is 'getting the government off your backs.'" These quotas, which at the time guaranteed domestic producers a price that was double the price on the world market, simply won't go away.
"The U.S. sugar program uses domestic marketing allotments, tariff-rate quotas, and high out-of-quota tariffs to restrict the amount of sugar available to the U.S. market," reports a recent U.S. Department of Agriculture explainer.
"In conjunction with market price support, the program also supports U.S. sugar prices, which are usually well above comparable prices in the world market." A recent study from my R Street Institute colleague Nan Swift, a resident fellow in our governance program, shows that artificially sweetening sugar-industry prices comes at a high economic cost for other industries, which is, quite frankly, how all these tariffs and trade restrictions end up working: High sugar prices put U.S. food makers at a competitive disadvantage and kill jobs.
In the meantime, many candy makers have moved production to Canada or Mexico where sugar can be found for half the price.
"Sugar production damages the Everglades by land drainage, habitat destruction, and the run-off of chemicals in the fertilizers used by sugar growers." Yet, 16 years later, nothing much has changed.
The federal price-support program directly bolsters prices only for consumption, yet the Department of Agriculture explains that its "Feedstock Flexibility Program is designed to divert sugar in excess of domestic food consumption requirements to ethanol production." So federal policy indirectly promotes sugarcane plantings for industrial uses, as well.
As Swift further explains, "With high prices guaranteed by the U.S. government and little-to-no consumer choice, there's no incentive to innovate or ensure that land, capital and human resources are being put to their best, most rewarding purpose." As Reagan famously said, "Nothing lasts longer than a temporary government program." That certainly seems true for the federal sugar program.
https://spectator.org/government-interference-ruins-yet-another-industry-sugar/
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