Not-so-Sweet Sugar Program Leads to Lonely Hearts on V Day

Valentine’s Day is here, and the chocolate aisle of many-a-supermarket has already been plundered. Millions of consumers buying chocolates for their loved ones have noticed that prices are way higher than they were last year. Chocolate prices are up about 12 percent from 2022, contributing to an astounding $26 billion in expected Valentine’s Day spending. Unfortunately, these figures are far higher than they ought to be thanks to outdated and unnecessary government policies. Federal bureaucrats use tariffs to prop up the price of domestic sugar, leading to heartbreak and empty wallets. It’s time to show consumers some love and finally end the U.S. Sugar Program.

For nearly 100 years, America’s not-so-sweet sugar policy has inflicted significant costs on consumers, confectioners, and food producers. Though the federal government has taxed sugar imports since time immemorial, the infamous 1934 Sugar Act laid the groundwork for a sprawling import, allotment, and quota scheme that froze markets and calcified sugar prices. Fast forward to today, and federally mandated minimum sugar prices continue to grip the American marketplace. Price support loans extended through the Department of Agriculture result in U.S. sugar prices significantly higher than the worldwide average. Domestic raw sugar prices sit at around 36 cents, compared to around 19 cents across the globe. Similarly, the price for wholesale refined cane sugar in the U.S. is more than double what foreign consumers pay. The government knows that domestic price supports would fall apart if exposed to any international competition. Onerous quotas and tariffs keep the system intact, practically banishing imported sugar from supermarket shelves.

These byzantine price controls force Americans to cut back on their purchases, to the detriment of thousands of small businesses. Baltimore, Maryland-based Wockenfuss Candies owner and president Paul Wockenfuss expressed concerns that strict import restrictions create an “unlevel playing field” that is “just hurting the smaller businesses.” And when businesses can’t sell their products due to dubious government programs, jobs are inevitably lost. According to a 2013 Iowa State University study, the U.S. sugar program costs up to 20,000 jobs per year even considering employment in the “protected” domestic sugar industry.

Yet, advocates for the broken status-quo warn of the dire consequences of the U.S. opening its markets to cheap foreign competition. They’ve even adopted the reasonable-sounding position that the U.S. sugar program can go – so long as other countries ditch their sugar subsidization schemes first. This concept, known as “zero-for-zero,” is in fact an unattainable ideal that all-but-ensures that sugar protectionism will remain a staple of U.S. policy. Claims abound that the U.S. “unilaterally disarming” on sugar policy is only a sweet deal for foreign companies and the governments subsidizing them. The European Union proved these “zero-for-zero” proponents wrong in 2006 when it implemented a wide-ranging quota relaxation and target price reduction scheme. Sugar prices have fallen considerably since reform, and, despite recent price increases, are still significant lower than they were pre-reform. And, due to further farming-related liberalizations, European production relative to consumption is growing and will likely continue to grow.

America could have a similarly sweet experience by kiboshing its sugar program. Consumers should be able to buy chocolates for their honeys without breaking the bank.

Ross Marchand is a non-resident fellow for the Taxpayers Protection Alliance.