The US Sugar Quotas Essay
The US Sugar Quotas
In the bid to regulate the amount of sugar imported into the United States, the federal Government imposed a quota that gave limited exclusive rights of export to a few countries. These countries range from Brazil, Philippines, Peru and Colombia among others. The logic behind this move was to protect the United States infant sugar industry from the competition from foreign farmers that enjoy more conducive environment for surplus production. It was also in the bid to appease farmers from Louisiana territory. This was in spite of the fact that experts had warned that sugar growing in the United States would be impeded by the harsh environment. Others argued that the tariffs by the 1820s had to be maintained so as to maintain a high demand and the value of slaves.
The imposition of sugar tariffs and quotas is supposed to help in subsidizing sugar growing. These sugar quotas continue to have negative impacts. It has to be understood that this is a costly system to the consumers and the taxpayers. The United States has maintained a very high price for its sugar, higher above the international price in sixth fold. James Bovard notes that “each 1-cent increase in the price of sugar adds between $ 250 and $ 300 million to consumers’ food bills.” He continues to note that a study conducted by one commerce department found out that “sugar program was costing American consumers more than $3 billion a year” (1998).
The quota after its imposition single-handedly handed blows to other types of businesses. Brazil in a retaliatory stance reduced significantly its consumption of the American grain. Other countries that were relying on sugar exports to America resorted to wheat and corn, stiffening the competition that exists between the American and other countries. Candy producers have also been hit the worst. Initially, candy firms were circumventing the sugar quota by importing products high in sugar and then sifting the sugar, the federal government made a crackdown on this. Now, these firms are being forced to compete with their foreign counterparts who apparently have access to cheap sugar and hence cheap chocolate has increased, hurting the local industries.
A number of people in the United States have lost jobs due to the sugar quotas. This number is higher than the number of farmers that the quota purports to protect. According to James Bovard, a commerce department had it that “the high price of sugar destroyed almost 9,000 US jobs in food manufacturing since 1981.” An example is given of one Branch Candy Company that relocated to Canada terminating over three thousand workers contracts.
It remains the opinion of the majority that the sugar quota is not only hurting the multilateral tie that the United States has enjoys with the neighboring countries, it is also exploitative to the consumers. It is the high time that these quotas were abolished and the sugar plantations converted to other viable crops.
The taking over the mantle of power in the house by the Republicans in the mid 1990s had given false signs that the sugar quota would finally cease to exist. A bill co-sponsored to end the program lost narrowly as the house voted to stay the sugar quota system. Immense lobbying took place in the house before the voting. This indicates how volatile the debate is and how it is influenced by politics and the fear of backlash from the sugar growing Districts.
An analysis of the history and recent trends of the United States sugar quota reveals it has always been at the centre of American politics especially on its relations with the immediate neighbors such as Cuba and Mexico. The Clinton administration for example had to grapple with the sugar politics as the congress was being required to approve the North American Free Trade Agreement (NAFTA).
One specific aim of NAFTA was to remove the quotas and the tariffs that existed between the United States and other countries such as Mexico and Canada. The removal of the stringent controls with Mexico could have the net result of opening up the United States market to the unlimited imports of sugar thus threatening the high sugar prices existing (Roberts, P., 1999).
Right from the early 1800, politics have dominated and completely dictated the implementation of the sugar quotas. Former congressmen have been enjoying lucrative contracts as lobbyists for the industry or for the foreign sugar producers wishing to be a part of the exclusive list. It is to be noted that the number of farmers set to profit in the United States sugar quotas fall way below fifty thousand, but due to the sensitivity of the matter and the amount of money involved, they have been able to influence the sugar importation policies in the excuse that it is in the bid to protect an infant industry. The sugar industry in the United States has become lucrative solely because of the subsidies it receives.
The taxes imposed on sugar extend far beyond the price and its cost. The protectionist and the loan program on sugar mean that the farmers are in a win-win situation. They have enough funds to cater for cost of growing and producing and are slated to sell at a high price. All this is a done in the wake of sharp criticm that has reigned in sugar politics especially from the affected neighbors. In the bid to respond to the criticism on the infringement of the free market and enterprise spirit, the Reagan administration for example formed the foreign aimed Program aimed at providing the affected countries with food.
The fears by the producers that imports will lead to reduced sugar prices and the loss of revenue and subsidies has led to the immense lobbying especially by the districts producing sugar, this has prompted favorable policies and bills in the congress.
Roberts, Paul. Nov. 1, 1999. The Sweet Hereafter: Our Craving for Sugar Starves the Everglades and Fattens the Politicians. Harpers.
James Bovard, April 1998. The Great Sugar Shaft. The Future of Freedom Foundation. Retrieved on 12th may 2008 from http://www.fff.org/freedom/0498d.asp
University/College: University of California
Type of paper: Thesis/Dissertation Chapter
Date: 20 March 2017
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