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  • The Cost of Sugar Subsidies

    Even in a season characterized by candy canes and cookies waiting for Santa, protectionism, specifically the U.S. sugar program, hurts American consumers and workers. The U.S. sugar program provides a classic example of a special interest group benefiting from political connections, to the detriment of American consumers.

    The sugar program imposes trade barriers that force American consumers to pay approximately double the world’s sugar price. The jobs “saved” by the program come at a high price. U.S. consumers pay an extra $826,000 for each sugar production job saved. Sugar farmers, often collectively known as “Big Sugar,” contribute extensively to political campaigns, with the nine main sugar farms or refinery groups contributing nearly $1.5 million to candidates in 2007 to maintain this overt corporate welfare.

    The U.S. sugar program also destroys American jobs. The U.S. candy industry has been forced by artificially high sugar prices to ship candy manufacturing jobs to Canada and Mexico. Artificially high sugar prices led Hershey’s food, for example, to close plants in California, Pennsylvania, and Colorado, relocating them to Canada at a cost of 1,000 American jobs. Through its sugar program, the United States is effectively picking the winners, namely “Big Sugar,” while letting the losers, such as the candy industry, fend for themselves.

    The U.S. sugar program illustrates a broader point about free trade, namely, that protectionist policies don’t just hurt American consumers by forcing them to pay more at the cash register. Trade barriers also cost American jobs, all to benefit a few with political connections.

    Andre Rougeot is currently a member of the Young Leaders Program at the Heritage Foundation. For more information on interning at Heritage, please visit: http://www.heritage.org/about/departments/ylp.cfm

    Posted in International [slideshow_deploy]

    7 Responses to The Cost of Sugar Subsidies

    1. Common Sense, Arvada says:

      We experienced this first hand. The Jolly Rancher factory was just down the street from us in Wheat Ridge, CO. You could smell the candy when you drove by. It originally was a family-owned business that was purchased by larger companies over the years and finally by Hershey.

      When Hershey closed the plant and moved production elsewhere, the local institution was gone along with many jobs, including for people who had worked there their entire lives.

      Thanks to some not-in-my-backyard neighbors against redevelopment, the land still sits empty, surrounded by barbed-wire.

    2. Patrick Lynch...Bost says:

      Great piece! So what your saying is free trade exists! How is it free for The people who do the hard work in the fields …and what makes you believe that the wealthy corporatists that collect all the money will pass any on to the consumer…certainly not the help ! Those people who do those jobs are americans…who support the tax base and local economies…what makes you think that humankind should serve capitalism and not the other way around…we are not a means and end! Merry Christmas…and don't forget those less fortunate!

    3. Bobbie says:

      Anybody else need a clearer picture of the American authority and what the plans are? Stop this!!!!!

      For one, sugar is a natural energy substance for the human body.

      There are more hypoglycemics and diabetics than there are obese people. This is a health issue and a personal choice for those whose diet isn't their concern. Get out of your unconstitutional duty!

      Freedom of personal health insurance gives freedom of personal/parental choice. Government insurance is government doing the choosing. One of their ways to control lives and destroy the economy.

      Freedom. Freedom to access needs from nature that come in necessary and many productive, economical forms.

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    6. George Colgrove, VA says:

      All I know, is that I prefer the Mexican Coca-Cola product over the American Coca-Cola product. The Mexicans use sugar, we are forced to use the sick tasting corn syrup.

      This has been a long time example how the federal government can be co-opted and practically owned by large corporations and we the consumers are stuck with the results. Anyone can make anything sound altruistic – for example, we need to save our farmers. However, has this saved us? Where has the money gone? Has it gone to small farmers?

      The fact is, this has only perpetuated the doom of many farmers. In Vermont, many farmers have abandoned corn and chose to diversify their crops to many things and on top of that offer organic alternatives. These farms have prospered regardless of the failed federal government and its programs and policies. Where has the money gone? It has gone to their biggest lobbyists. Large corporations like Monsanto and ADM are making out big time on federal subsidies that result in practically everything being made out of soy and corn.

      Eliminate the subsidies, and the corresponding federal departments associated with those subsidies and let the market get back into swing. End the ethanol subsidy fraud and end the corn syrup subsidy fraud. Let Americans make their own choices. Right now, if I can find a Mexican Coke, I WILL buy it over the junk produced here in America. There is a difference and it is better.

    7. mor1951 says:

      We need to end the subsidies for corn and sugar that do nothing but fatten the wallets of agribusiness and our waistlines and ruin our health. You hear lots of complaining about welfare, but very little comment on the issue of corporate welfare.

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