Researcher estimate that protectionist sugar policy cost Americans around $3 billion a year mainly due to import quotas that limit the amount of sugar coming to the US from foreign sources. The cost of sugar production coming from the tropics is nearly half of the cost of beet sugar produced in the cold climates of Minnesota and Michigan.
This protectionism cost American consumers and US sugar-using businesses, who are forced to pay more than twice the world price of sugar according to data from USDA consumption data of 23.58 billion pounds or 10.7 million metric tons in 2016. Domestic production accounted for 7.7 million metric tons but since the sugar lobby is allowed to control with quotas strictly limits the amount of sugar from foreign markets and forcing the domestic market to pay 16.9 cents more per pound for inefficiently produced sugar in the domestic market priced at 43.4 cents per pound while the international market is trading at 26.5 cents per pound.
The actual cost of protectionism to the overall economy is hard to calculate but the direct cost of comparative values is not and it is measurable since USDA and the futures market regularly report prices for both domestic and international markets.
No comments:
Post a Comment