Break the sugar ad­dic­tion

How a fed­eral pol­icy is cost­ing Amer­ica jobs and money

The Washington Post Sunday - - SUNDAY OPINION -

CONGRESS AND the Obama ad­min­is­tra­tion are in the mar­ket for fresh ideas to cre­ate jobs. Or so we are told. So far, how­ever, we haven’t seen too many specifics — but that may be about to change. Two sen­a­tors, one from each party, have in­tro­duced leg­is­la­tion that would phase out the costly, job-de­stroy­ing fed­eral sugar pro­gram. Demo­crat Jeanne Sha­heen of New Hamp­shire and Repub­li­can Mark Kirk of Illi­nois call their bill the Stop Un­fair Give­aways and Re­stric­tions (SUGAR) Act. De­spite the cutesy ti­tle, it’s a se­ri­ously nec­es­sary pro­posal.

Cur­rent law is a pas­tiche of pro­tec­tion­ist mea­sures that drives up prices for con­sumers in two ways. First, 4,700 U.S. sugar cane and sugar beet farm­ers share a govern­ment-guar­an­teed 85 per­cent of the U.S. mar­ket; the re­main­ing 15 per­cent gets di­vided among some 40 lucky sugar-ex­port­ing coun­tries, plus Mex­ico, which re­cently started ex­port­ing here un­der the North Amer­i­can Free Trade Agree­ment. Sec­ond, the govern­ment guar­an­tees min­i­mum prices for both raw cane sugar and re­fined beet sugar. The com­bined ef­fect of these mea­sures has been to keep the U.S. price well above the world price. Ac­cord­ing to Ms. Sha­heen, con­sumers pay an ex­tra $4 bil­lion for their food be­cause of these poli­cies.

When food costs more, con­sumers buy less of it, and pro­ces­sors must cut pro­duc­tion. There­fore, U.S. sugar pol­icy costs jobs among bak­ers, candy mak­ers and other food pro­ces­sors. Es­ti­mates vary; Pro­mar In­ter­na­tional, an agri­cul­ture con­sult­ing firm, pro­duced a fig­ure of 112,000 jobs lost be­tween 1997 and 2009. In 2006, the Com­merce Depart­ment es­ti­mated that the sugar pro­gram cost three man­u­fac­tur­ing jobs for each job it saved in sugar grow­ing and har­vest­ing. And, by the way, job preser­va­tion in U.S. sugar grow­ing and har­vest­ing came at the ex­pense of agri­cul­tural em­ploy­ment in poorer sugar-pro­duc­ing coun­tries.

Ms. Sha­heen andMr. Kirk have of­fered Pres­i­dent Obama and the Repub­li­can lead­er­ship in the House a com­mon-sense way to keep their prom­ises to get rid of un­nec­es­sary govern­ment reg­u­la­tion and lib­er­ate the job-cre­at­ing en­ergy of the mar­ket. As such, it’s also a good early test of the sin­cer­ity of those prom­ises.

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