Monday, March 15, 2010

Sugar Prices and the Price of Protectionism

Those who advocate government intervention in the economy oftten try to claim it will help the many at the expense of the few. The reality is that the opposite is often true. Government intervention usually helps a few at the expense of the many. This problem can be seen at its worst in the case of sugar import quotas.

Due to severe quotas on the amount of sugar that may be imported from foreign countries to the USA, our domestic wholesale price of sugar is 35 cents per pound, versus only 20 cents in other countries. The result is that American consumers are paying 15 cents per pound more to American sugar growers than they should be.

Most of the sugar in the USA is grown in western Palm Beach county, in south Florida. This is land that was once the northern part of the everglades, a unique ecosystem that exists nowhere else in the world. The conversion of the land to sugar cane fields has disrupted the natural flow of water from lake Okeechobee to what is left of the everglades to the south in Broward and Miami-Dade counties. What is worse, the sugar growers release fertilizers into the water that pollute the southern everglades.

The purpose of the sugar import quotas are allegedly to protect American jobs. However, from what I have seen, most of the workers in the sugar fields are illegal immigrants and are paid abysmally low wages.

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