CWT Blog

Who's Getting the Sweet Deal This Easter?

Posted by Consumers for World Trade Fri, 06 Apr 2007 20:22:00 GMT

Christopher Wilken, Legislative Representative

April 6, 2007 -- Easter is upon us -- that time of malted eggs, chocolate bunnies, and hidden taxes.

Hidden taxes? Yep.

They take the form of a high border tax--called an import tariff--on sugar, which, when coupled with import qutoas on the sweet stuff serves to make the U.S. price of sugar twice what it is on the world market. Every candy maker in the U.S. has to pay this price for the stuff you will put in your Easter basket this Sunday. A portion of that price increase is passed along to each and every one of us. Not only when we purchase our Peeps this weekend, but every time we eat a candy bar.

According to the Organization for Economic Cooperation and Development (OECD) the U.S. sugar program costs consumers roughly $1.5 billion dollars a year. This is an enormous amount of dough. And keep in mind that while the costs of the program are paid by all American consumers , 42% of the benefits are handed to 1% of all sugar producers, or 150 farms. The difference between the domestic price of sugar and the price abroad is essentially a hidden “protection tax.” It can also be seen as an indirect payment by consumers to special interests as compensation for an effective lobbying operation. It's the worst kind of corporate handout.

Unfortunately, the cost of the sugar program is not limited to what consumers pay at the checkout. The Florida Everglades are slowly shrinking, in part because sugar price supports have fueled the expansion of the sugarcane industry in an area where large corporate farming would never have been possible. As a result, this program leads to the degradation of an additional three to five acres of the Everglades every day. In addition, US protection of the sugar industry hurts developing countries by denying them access to one of the largest markets for one of their most competitive crops. Industries that consume sugar, such as confectioners are impacted by the high price of sugar. In fact, Brach’s and Life Savers are just two American candy makers that have moved their operations off-shore in part to gain access to sugar at world prices. For the remaining US confectioners these high prices cut into their bottom line and reduce what they are able to allocate towards other costs such as employing workers. If you don’t mind shelling out double for big sugar, you may want to think about the impact of the sugar program on the environment, developing countries, and U.S. employment.

Just a few things to think about during this holiday season.