Sugar Rush
On this blog, I've often opined on the enduring problem of sugar protectionism, which drives sugar-using businesses out of the United States and stifles growth in developing countries that produce sugar far more economically than American farmers. Beet farmers and cane growers have tremendous political clout, even greater than environmentalists, Coca-Cola, and Hershey (not to mention free-trade advocates or consumers, who count for almost nothing in Washington).
Recent reports in the WaPost and NYT, however, suggest that maybe, just maybe the sugar lobby has overstretched. Here's the Post account, which focuses on beet farmers--the sugar lobby's secret weapon, or so I'm told by someone who unsuccessfully took them on some years ago.
"We should not allow the very tiny minority of U.S. agriculture that believes it will be negatively impacted to derail this agreement," said Rep. Wally Herger (R-Calif.) at a House Ways and Means Committee hearing last month, noting that farmers in his district who produce rice, almonds, walnuts and other crops have enthusiastically backed CAFTA, which they feel offers important new export opportunities.
The specter of CAFTA collapsing over sugar is particularly galling to economists who have long criticized federal restrictions on sugar imports. "Sugar is a prototypical case of a policy that favors the few at the expense of the many," wrote Kimberly A. Elliott, a research fellow at the Center for Global Development, in an analysis last month....
To critics, that's an argument against the U.S. sugar program. "It's true that beet farmers don't make much money, but that's because it's inefficient to produce sugar from beets -- the rule of thumb is that it's about twice as costly as cane," said Donald Mitchell, a World Bank economist.
According to a study Mitchell authored, eliminating the distortions created by government policies in the United States, Europe and elsewhere could create 1 million jobs in developing countries that are more efficient sugar producers. And American consumers would benefit; workers in sugar-using industries might benefit, too.
The Times report emphasizes "big sugar," ignoring the beat farmers. Here's the opening:
At the Ferrara Pan Candy Company, confectioners of everything from gummy bears to red hots, rail cars used to deliver three million pounds of sugar a week to its bustling plant just outside America's candy capital here.
Today, the trains bring only half as much, barely enough to fill the factory's 65-foot sugar silos. That is largely because Ferrara, in an effort to avoid the high cost of government-protected American sugar, has been moving some of its century-old operations to Canada and Mexico.
The reason for this decade-long shift can be traced to global economics and the domestic sugar industry, which is fast being branded as a spoiler nationally and internationally. "Big Sugar" is in trouble not only here in Chicago, where it is losing some of its customers, but also in Washington, where it is losing some of its longtime political allies.
Rightly or wrongly, the sugar industry is being blamed for an assortment of evils: undercutting the American food industries that rely on sugar, fighting global diet guidelines that aim to improve children's health and curb obesity, and, most recently, for hurting the chance for passage of the Bush administration's top trade priority, the Central American Free Trade Agreement, known as Cafta.
"More and more people have begun to realize that this is an indefensible program from a trade policy standpoint," said Clayton K. Yeutter, a former United States trade representative and agriculture secretary, who is now senior adviser to the Food Trade Alliance, which represents companies in food processing, retailing and restaurants that are lobbying in favor of the agreement. "Beneath the surface one can sense that the house of cards has begun to shake a bit."
From your mouth to God's ears, Mr. Yeutter.
BTW, if you follow the links to my earlier discussions, you'll need to scroll down the page to find the entries. To keep the number of files manageable, my older archives don't break out separate posts.