Federal Sugar Policy Hurts Industry Jobs, Taxpayers ‘WSJ’ Op-Ed Claims

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New York —Valentine’s Day shoppers know how expensive chocolate can be in those heart-shaped boxes, but an op-ed in The Wall Street Journal explains why the high prices could be the government’s fault.

Joe Pitts, a Republican from Pennsylvania on the House Committee on Energy and Commerce, and David McIntosh, a former Republican congressman from Indiana and currently president of the Club for Growth, penned the piece that blames U.S. policy based on a “convoluted price-control program, begun during the 1930s” for the prices U.S. consumers pay, which is roughly double worldwide market prices.

“Here’s how it works,” the authors explain. “Every year, Agriculture Department bureaucrats set the maximum output of every sugar producer. The feds then buy the surplus, i.e., anything in excess of the output level, from domestic producers — some of the top-producing states are Minnesota, Louisiana, Idaho and Florida — and sell it at a loss to ethanol plants. They also offer processors non-recourse loans, and if the price of sugar falls below a certain (arbitrary) point, the loan can be repaid in sugar, some of which is also sold to ethanol plants at a loss.”

The result, they say, ends up costing taxpayers on average $11.5 million a year, or for the average American family an additional $40 in groceries a year.

“As if domestic price-fixing by the government — here, driving prices up by setting production limits — weren’t enough, the feds then set a limit on sugar imports, and punish any imports above that limit with heavy tariffs,” the authors write.

This causes countries such as Canada to appeal more to businesses looking to lower costs by sending jobs to other nations. Citing a 2007 report from The Cato Institute, a libertarian think tank, the op-ed states that for every job the sugar program protects it kills three others.

The authors say the country’s 4,500 sugar beet and sugar cane farmers are able to meet the demands but it’s this system that has consumers paying $24 a pound for brand-name basic assortment Valentine’s Day chocolate.

Read the full op-ed here if you have a subscription.

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