Sugar Rush...
Interesting article on
Crumb Trail about Sugar, Subsidies and Tariffs and Robbing Peter to pay Paul...
bq.
Sugar Rush
There's an interesting and informative post at Knowledge Problem primarily about sugar subsidies and the ripple effects they have on industries that use sugar, such as candy makers. The post quotes a Town Hall column by Walter Williams.
bq. Town Hall: Chicago has been home to many of America's candy manufacturers, but today they've fallen on hard times. In 1970, employment by Chicago's candy manufacturers totaled 15,000, and now it's 8,000 and falling. Brach used to employ about 2,300 people; now most of its jobs are in Mexico. Ferrara Pan Candy has also moved much of its production to Mexico. Yes, wages are lower in Mexico, but wages aren't the only factor in candy manufacturers' flight from America. After all, Life Savers, which for 90 years manufactured in America, has moved to Canada, where wages are comparable to ours.
And back to Crumb Trail:
bq. Robbing Peter to pay Paul. Subsidies to one industry to "save jobs" etc. costs jobs in another. The sugar production industry has done a better job lobbying congress for support than the candy industry. But sugar import quotas to keep out cheaper sugar from other countries are much more important than subsidies. Expensive sugar would have no market in the US if imports were not restricted. The criticism, while useful, is poorly targeted and differs from the more common effect of subsidies in lowering commodity prices below production costs to freeze out foreign competition and provide world markets for excess production.
Interesting thoughts - back40 (Crumb Trail's author) goes into some other thoughts and provides some links. This also ties into the use of High Fructose Corn Syrup (HFS) and the huge subsidies that companies like Archer Daniels Midland are given to bring this product to market. The Hawai'ian sugar industry tanked because of this - very few cane producers there now.
Posted by DaveH at February 25, 2004 1:42 PM