The Great Rich-Country Sugar Scam
Oxfam, the British charity, is calling for an immediate slash in rich-country sugar subsidies that lock out sugar imports from desperately poor places like Northeast Brazil and Mozambique that can produce little except sugar cane.
EU sugar subsidies, it says, is costing the pitiful economies of Mozambique, Malawi and Ethiopia $238 million in the past three years. At the same time, ordinary Americans and Europeans are shelling out billions of dollars per year in subsidies for white sugar and corn sweeteners.
The crowning irony: the sweetener subsidies, paid mainly to a few big companies, are blocking U.S. and EU farmers’ ardent efforts to sell more of their other crops in densely populated countries where food demand is outstripping local farm production.
Without free trade, poor-country farmers remain locked out of affluent markets, and rich-country farmers are locked out of Asia’s growing markets for their farm products. Consumers in all countries pay higher taxes and food prices.
In a severe blow to the world’s future for free trade in Agriculture, last fall Brazil led a poor-country walkout from the World Trade Organization’s Doha Round over the refusal of America and Europe to scale back their farm subsidies.
Farm trade reform would let each country produce to its highest-yield efficiency. The United States could swap wheat to Brazil, because it gets double the per-acre yields of subtropical Brazil. Brazil, in contrast, gets twice the sugar yields of American sugar beets. Such trade would permit the world to feed itself from fewer acres, at less cost to poor families and the environment. Farmers in both countries would increase their profits through lower costs.
Both the United States and EU governments are also stuck with farm policies they can’t afford.
The America farm subsidies were ramped up in 2002, as both Republicans and Democrats tried to avoid losing Midwest senate seats in a closely run election. Now, the costs of saving Social Security loom over every other federal budget issue. The farmers fear their subsidy rug will be yanked from under them-without any offsetting free trade access.
In Europe, the EU is about to take in 10 additional countries, along with seven million extra farmers and tens of millions of hectares of farmland newly eligible for subsidies. The EU cannot afford to further increase its $350 billion per year in farm outlays, so the EU’s current farmers will likely have to take cuts. (The EU denies it, but few believe.)
America’s sweetener subsidies work by barring imports of foreign sugar, no matter how efficiently it’s produced. The big, politically connected U.S. Sugar Corporation (accused of polluting the Everglades), and a few hundred sugar beet growers with quotas, profit from the high U.S. sugar prices created by the trade barrier. Corn growers also think they profit from the sugar policy, since most of American processed foods and sodas are now made with corn sweetener. They forget, however, that if the trade barriers were dropped, they could sell far more corn to Asia as feed grain than they sell to corn sweetener companies today.
Environmentally, of course, the world is far better off using feedstuffs produced from the flat, rich soils of Illinois and Iowa (which never had many wild animal species) than it is clearing species-rich tropical forests or deforesting steep Chinese hillsides. (China is currently replanting trees on millions of acres of those hillsides after their conversion to “cropland” produced massive floods and soil erosion.)
The world of 2050 is likely to demand nearly three times as much food, to feed a peak population of 9 billion affluent humans. Trying to achieve that without biotech crops and with the farm trade barriers in place is a recipe for environmental disaster and continued tropical poverty.
Hopefully, the rich countries are learning (from the World Trade Center, from Madrid, from Bali) that they have a life-and-death stake in reducing poverty and amplifying hope in the future. For people everywhere.
Cutting sugar subsidies is not a bad place to make a win-win move for a better future. Let’s get rid of the rich-country sugar protections that make everybody poorer
