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US sugar policy leaves sour taste for candy makers

Dan Weissmann Aug 27, 2014
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The U.S. Commerce Department will impose new duties on sugar from Mexico, responding to complaints from U.S. growers that Mexico was dumping sugar here for less than it sells for there. Sugar growers have a track record of getting what they want from policymakers: Government protections have kept U.S. sugar more expensive than the world market price for decades.

That doesn’t sit well with bakers and gumball makers.

Make that gumball-maker. Singular. George Stege,  president of Ford Gum and Machine Co. in upstate New York, says he is the only gumball manufacturer left in the United States. His last domestic competitor, he says, moved production to Canada more than a decade ago.

“The advantages of being in Canada are that they can acquire sugar at world sugar pricing, which tends to be 40 to 50 percent lower than what I’m paying,” he says. “The cost of sugar becomes an insurmountable edge.”

He says the newest ruling is just more of the same: Government policy protecting sugar growers at his expense.

Iowa State University economist John Beghin recently looked at how many jobs the U.S. could save — making things like candy, baked goods and breakfast cereal — by changing policy to lower the cost of sugar. His best estimate is 15,000 to 20,000.  That’s lower than some industry estimates, he says. “But still, 15,000 jobs is nothing to neglect.”

Similarly, costs to U.S. consumers from high sugar prices look modest. Beghin pegs them around $3 billion dollars a year for the whole country — which breaks down to about $10 a year per person. Not enough, he says, to write your senator about.

On the other hand, the American Sugar Alliance, which lobbies for sugar growers, is a diligent bunch of letter writers. “You have to admire them for their effectiveness,” says Beghin.

“Thank you for saying that the sugar industry is an effective lobby,” says Sugar Alliance spokesman Phillip Hayes. “I would certainly agree with that.”

He says they have to be — in order to protect their members from sugar growers in other countries, who pressure their own governments to protect their interests in much the same way.

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