Posted on 11/02/2013 8:35:11 AM PDT by Kaslin
It takes a lot to convince a company to move jobs out of the town that bears its name. But that’s the step Hershey took a few years ago, driven in part by cronyism.
The company is based in central Pennsylvania because there are plenty of dairy farms around. But sugar is an even more important ingredient in chocolate than milk, and the price sugar users in the United States pay is far higher than the world market price.
According to the U.S. Department of Agriculture, in 2012, the price of raw sugar was 40 percent higher in the United States than in the rest of the world. And, while an international sugar glut is expected to send prices tumbling everywhere else later this year, U.S. prices will remain about the same. That’s because of a U.S. government program that guarantees sugar processors a minimum price.
That program costs American taxpayers about $1.4 billion each year. And the U.S. Commerce Department’s International Trade Administration says that U.S. consumers pay an extra $826,000 for each sugar-production job saved.
Further, according to the U.S. International Trade Commission (yes, there are both an International Trade Administration and an International Trade Commission, both run by the federal government), the sugar program imposes a $49 million net cost on the economy. That’s enough to buy 8.8 million five-pound bags of sugar. A study commissioned by the Sweetener Users Association sets the direct price even higher: between $2.9 billion to $3.5 billion per year.
Of course, the sugar subsidies would have to be a sweet deal for somebody; that’s why they’re maintained. They directly benefit fewer than 5,000 beet and sugar cane farmers. Most of them, like most big farmers, are fairly well off to begin with.
Meanwhile, according to a 2006 U.S. Department of Commerce report the U.S. has lost more than 10,000 candy-making jobs since 1997. The report adds that three candy-making jobs are lost for each sugar-growing and processing job saved by higher domestic sugar prices. Maybe sugar could be great for kick-starting the economy, if we’d simply allow candy makers to buy it at international market prices.
But it’s difficult, because the sugar growers are well-organized while consumers, the real losers here, are diffused across the country.
“As long as the government has the ability to hand out favors to some industries and punish others, resources will be diverted away from productive private-sector activities to fund lobbying campaigns in Washington, D.C.,” as Heritage’s Bryan Riley puts it.
Sugar’s not a big deal in the grand scheme of things. The country needs to throw off the yoke of ObamaCare, needs better tax policy, needs to reduce spending and reform entitlements. But a long journey involves both big steps and small ones.
Ending the sugar subsidy program would allow lawmakers to see that they can roll back a subsidy without the sky falling in on them. They could then take the next logical step and reform all farm subsidies. That would begin piling up savings, opening up markets and saving food shoppers money.
As another Halloween comes and goes, the one thing that just won’t die is the sugar subsidy. “This Depression-era program, which was supposed to end in 1940, has outlived its intended lifespan by 72 years,” Heritage’s Riley concludes. “It should be abolished.” That would be a sweet deal for all of us.
Now YOU owe me a keyboard.
Damn ... the more I think about that, the logic applies to DC.
Windows or Mac?
The government needs to get out of the sugar farmers protection racket... If they did we could all say bye bye to High Fructose Corn Syrup...and wouldn’t that be wonderful?
If we can’t end the sugar subsidy we won’t be able to reform anything.
My grandma raised me and she was hoarder. My grandpa worked on a farm. We used to have him roll us down the hill in a ball of barbed wire that grandma had saved. With enough momentum going down we could, utilizing the gripping power of barbed wire, climb the next hill and so on and so forth until we got to school seven hills away.
Once there our teacher would cut us out of the wire and stanch the bleeding with baking soda. To go home she’d lay us in a Saranwrap-lined pool and once frozen (it was always winter where I grew up) place us in her catapult and aim us for home. She didn’t need the ice for launching or weight (we were husky enough on just the saucer of skim milk and lone boysenberry we were allotted as our single daily meal), but it helped absorb our landings.
You’re welcome. ;-]
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.