The Sugar Cartel versus the American People

American Institute For Economic Research: Written by Paz Gomez. April 20, 2018.

The famous quote by Milton Friedman that “nothing is so permanent as a temporary government program” encapsulates a dangerous risk that comes with protectionist measures. The US sugar subsidy program is perhaps one of the best examples. It has not been modernized in 80 years and has unnecessarily killed countless jobs.

The program imposes on consumers and businesses an estimated annual burden of US$2.4-4 billion to fuel the inefficient US sugar-production industry. Colin Grabow, a policy analyst at the Cato Institute, offers a precise breakdown of the embarrassing crony scheme, of which many Americans are unaware.

It is such an egregious display of special interests trumping economics that many manufacturers that use sugar as a main ingredient have given up hope and moved to neighboring countries. “From 1982 through 2016, the average US sugar price was 29.28 cents per pound, nearly double that of the average world price of 15.12 cents,” Grabow explains. 

Others, such as Coca-Cola, have been forced to replace the costly US-produced sugar with alternatives such as high-fructose corn syrup. If you want the original Coca-Cola formula, you have to import it from Mexico.

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