Sweet-and-Sour Politics

Another good reason to rewrite the 1985 farm bill has emerged with the decision by the Department of Agriculture to cut 1987 sugar imports by 41%, to their lowest point in a century.

This will please only sugar growers in the United States--a group with muscle on Capitol Hill disproportionate to their relatively small number. But it means higher prices and possibly shortages for consumers. And it cruelly punishes some of the world’s most impoverished nations whose economic well-being depends on sugar exports. Some of these nations are among the best friends of the United States.

The Department of Agriculture argues that it had no choice, given the congressional mandate that the sugar program be operated without cost. The only way to operate without cost is to squeeze off imports and allow domestic market prices to soar well above the 18-cent-a-pound support level at which the government would have to step in and buy sugar.

Domestic U.S. consumption continues to decline --which is hardly surprising, given the shortsighted sugar-lobby tactic of encouraging inflated prices. This has given corn-derivative sweeteners an increasing share of the market. The domestic sugar market shrank by about 170,000 short tons in the year coming to an end. But while imports are being cut by more than 700,000 tons for next year, domestic allocations will rise by 331,000 tons. In the total domestic sugar market, U.S. producers are being given 86% of the sales, leaving the pitiful balance to be shared by 40 nations--many of them already in desperate straits.

The biggest quota goes to the Dominican Republic, with 17.6% of imports, but it will see its sales to the United States fall from 302,016 tons to 160,160 tons. Congress, in a gesture of generosity, supplemented the quota of the Philippines by giving it South Africa’s share after the adoption of sanctions against South Africa, but even with the boost the Philippines will see exports to the United States fall from 231,660 tons to 143,780. Another nation with close relations to the United States and sorely in need of export earnings to address its debt problems and fuel economic expansion is Brazil, the third-largest source of foreign sugar; its exports will be trimmed from 248,820 tons to 131,950.And so on with the other sugar producers, many of them the very nations of the Caribbean and Central America that the United States has been trying to strengthen economically so that they will be secure neighbors.

Congress may be pleased that it has placated the sugar growers at no cost, but in fact the cost, even though it doesn’t show directly on the federal budget, is enormous--not least for consumers. And the future cost of reconstructing broken economies and addressing new insurgency risks in impoverished nations cannot easily be calculated.