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The Cost of Sugar Subsidies

Posted By Andre Rougeot On December 6, 2010 @ 2:00 pm In International | Comments Disabled

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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 [2]. 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 [3] 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 [2] 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 [4]


Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2010/12/06/the-cost-of-sugar-subsidies/

URLs in this post:

[1] Image: http://www.foundry.org/wp-content/uploads/sugar.jpg

[2] $826,000 for each sugar production job saved: http://www.ita.doc.gov/media/Publications/pdf/sugar06.pdf

[3] $1.5 million to candidates in 2007: http://www.washingtonpost.com/wp-dyn/content/article/2007/11/02/AR2007110201899.html

[4] http://www.heritage.org/about/departments/ylp.cfm: http://www.heritage.org/about/departments/ylp.cfm

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