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Sugar Prices Not So Sweet This Halloween

Posted By Katherine Elliott On October 31, 2012 @ 5:10 pm In Economics | Comments Disabled

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It’s Halloween, and people have been stocking up on their candy supplies. What most Americans don’t know is that sugar in the United States is far more expensive than it should be.

Like zombies, vampires, and other monsters that that seem impossible to kill, the “temporary” sugar tariff from the Great Depression lives on today.

The tariff was put in place to protect the American sugar industry from foreign competition. But the impact on candy manufacturers and consumers continues to be felt.

Companies that require sugar are allowed to shop for sugar internationally until they reach a certain quota. After that, they have to purchase the rest of their sugar here or pay a prohibitive tariff. This is clearly incompatible with the values of a free marketplace.

It’s cheaper for some companies to produce sugary foods abroad and then ship them back to the United States. This encourages companies to move their factories overseas, as a Hershey plant did recently when it closed down [2] operations in three states and moved one of its factories to Canada.

The sugar tariff also destroys U.S. jobs. For every sugar industry job that the tariff saves [3], three jobs are lost in manufacturing.

Efforts have been made to repeal the sugar tariff, such as the Lugar Free Sugar Act of 2011 [4], but so far none has succeeded.

Why has a policy so contradictory to U.S. economic values remained on the books for over 70 years? The answer is quite simple: the disproportionate influence that sugar producers have with political leaders of both parties.

For example, sugar manufacturers contributed 55.1 percent of crop-related political action committee donations from 2002 to 2012 [5].

So when the kids are collecting their treats tonight, remember that the trick is on those who paid more than they should have.

Katherine Elliott 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 [6].


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

URL to article: http://blog.heritage.org/2012/10/31/sugar-prices-not-so-sweet-this-halloween/

URLs in this post:

[1] Image: http://blog.heritage.org/wp-content/uploads/candy.gif

[2] closed down: http://www.ita.doc.gov/media/Publications/pdf/sugar06.pdf

[3] every sugar industry job that the tariff saves: http://trade.gov/media/publications/pdf/sugar06.pdf

[4] Lugar Free Sugar Act of 2011: http://lugar.senate.gov/issues/ag/pdf/sugarbysection.pdf

[5] 55.1 percent of crop-related political action committee donations from 2002 to 2012: http://blog.heritage.org/2012/04/22/chart-of-the-week-crony-capitalism-leads-to-higher-sugar-prices/

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

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