Dive Brief:
- The U.S. sets a minimum price support level for sugar producers that results in higher costs for candy manufacturers.
- Prices are now around 22.28 cents a pound—14% higher than the global benchmark price—and can't fall much lower because of the price supports.
- The result is that candy makers such as Jelly Belly and Atkinson Candy have shifted operations overseas.
Dive Insight:
Price subsidies just get on our nerves. The arguments in favor of them never make much sense to us. First, there's the claim that jobs must be protected. But we see loads of jobs disappearing in loads of industries. It's just not clear to us why a clerk at a sugar-processing plant is more important than, say, a shoe-maker or newspaper reporter. (And with sugar the argument is even stranger. The Commerce Department says that each sugar job saved results in three candy jobs lost!)
The other argument has something to do with national security. We'll buy that argument for some items. For example, we have no doubt that there's a wisdom of a sort in the government buying and holding massive amounts of fuel. But sugar? Why in the world does the federal government take it upon itself to make sure sugar processors not have to deal with the same market forces that everyone else has to deal with? Blame Congress.