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Conservative Cronyism: America’s Sugar Policy



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On Monday, Representative Tom Rooney (R., Fla.) made the case for the government protection of the sugar lobby on the form if sugar tariffs over at the Daily Caller. Then yesterday, my colleague Rob Raffeti sent me this link, from which the congressman probably got some of his facts. It contains gems like this one:

Because of America’s sugar policy, consumers enjoy a safe and affordable supply of homegrown sugar at no cost to taxpayers. 

While it is true that the sugar industry has not received direct subsidies from the government since the 1970s, it is totally incorrect to claim that America’s sugar policy results in affordable sugar. America’s sugar policy consists of putting tariffs and quotas on foreign producers, meaning that US consumers pay much more for their sugar than they would otherwise. How much more? Probably twice as much. See this chart and explanation by economist Mark Perry. He writes:

The cost of most trade protection is largely invisible and hard to calculate, but the cost of sugar protection is directly visible and measurable, since the USDA and the futures markets regularly report prices for both high-cost domestic sugar and low-cost world sugar. Like all protection, sugar tariffs exist to protect an inefficient domestic industry (sugar beet farmers) from more efficient foreign producers (cane sugar farmers), and come at the expense of the U.S. consumers and the American companies using sugar as an input, and make our country worse off, on net. 

I’m reminded of the recent Quote of the Day from Bastiat: “Treat all economic questions from the viewpoint of the consumer, for the interests of the consumer are the interests of the human race.” U.S. sugar policy has a long history, going back to 1789 when the First Congress of the United States imposed a tariff upon foreign sugar, and is a perfect illustration of trade protection that ignores the viewpoint of disorganized, dispersed consumers in favor of the concentrated, well-organized interests of producers.

Unfortunately, lawmakers from Florida such as Marco Rubio and Tom Roomey continue to ignore the incredible cost this presents to Americans, and vote in favor of these protections. I have made the case before that we need to end this cronyism, and obviously we need to continue making it. 

George Mason University’s Don Boudreaux writes on this issue too, here.



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