Stop the Sugar Quota

The extension and enlargement of the sugar import quota will at least cool the inflation in the price of sweeteners in the United States, but it is only window dressing. The real need continues to be restoration of a free market and abolition of the sugar program. Congress will have an opportunity to do just that when the new five-year farm bill is written next year.

The action on the U.S. quotas means some immediate help for several nations whose economic well-being is of particular importance to the United States. The four largest quotas go to the Dominican Republic, Philippines, Brazil and Australia. Four Central American nations with major dependence on sugar exports also are quota recipients. They are Guatemala, El Salvador, Costa Rica and Honduras. Nicaragua should also be restored to that list.

The consumption of sweeteners is continuing to increase in the United States, but slowly. Deliveries of sugar this year will be up 1%, high fructose corn syrup up 3%. U.S. beet and cane production in the current crop year is estimated at 7.13 million tons. The sugar import quota has been increased from 1.1 million tons to 2 million tons, still far behind the 1977 import peak of 6.1 million tons.

The squeeze on imports in recent years has provided protection to American sugar growers at an enormous cost. The cost has been borne by foreign producers, most of them impoverished nations dependent on their commodity exports, in terms of lost markets.

And it has been borne by American consumers, who have been forced to pay what amounts to $3 billion a year in inflated prices, according to one consumer advocacy group, the Public Voice for Food and Health Policy. The protectionism has also distorted the sweetener market, encouraging a dramatic shift from sugar to the now-dominant corn-based sweeteners.

At a time when the United States is encouraging all nations to abandon farm subsidies and other programs that distort world trade in food commodities, the U.S. sugar program is a conspicuous embarrassment. New price increases, the highest in a decade, that led to the quota increases have compounded the burden on American consumers. Termination of the sugar program is the only appropriate way to protect consumers while assuring fairness to nations dependent on their sugar exports. The challenge to American sugar growers is to compete, not hide behind quotas.