Phil Hauck's TEC Blog

Wednesday, September 29, 2010

Sugar: The Very Costly Stealth Lobby

Not only is sugar the most addictive (and legal) “drug” extant and drives our national obesity epidemic, it’s also often ignored that because of the U.S. sugar lobby and cartel, Americans pay rates for sugar not lower, which you would think based on volume purchasing, but dramatically higher than the rest of the world.
By about 40% at a minimum!
It’s little known that until the 1900s, most of the federal budget dollars came from tariffs on imported goods. The sugar problem started in 1816 when high tariffs were imposed on imports to placate growers in the newly-acquired Louisiana territory. And they’ve been heavy ever since ... especially hiked during the Depression.
A 1998 study indicated that every U.S. sugar grower reaps an average of a $3 million benefit. At one point, sugar sold for 21 cents a pound in the U.S. when the world sugar price was 3 cents a pound.
This year, there has been more interesting developments, as the USDA began lowering quotas in response to sugar users who have heavy demand and feared the U.S. supplies would be insufficient.
An indication of the supply/demand squeeze: At mid-year, U.S. domestic sugar prices had increased 30% in the past 12 months to about 34 cents per pound ... while global prices were soaring to about 20 cents per pound.
This is the current situation, but the disparity isn’t unique. The U.S. quotas and tariff policies have been bolstered via the sugar lobby for decades ... and we as U.S. consumers have been paying the much higher price.

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