Sugary Mess

The time has come for the government of the United States to leave sugar to the marketplace and to unburden consumers from the billions of dollars that they are now forced to pay in inflated prices for the product.

No matter where you look, the global sugar situation is a mess. Production is way ahead of consumption. Prices are distorted by subsidies that leave but 10% of world production to the free market. Impoverished countries that are dependent on sugar exports are faced with market prices below the cost of production.

In all that chaos the United States is a major player. It is the sixth-largest producer after the European Community, Brazil, the Soviet Union, Cuba and India, but it is also a major importer, buying about one-third of the sugar that it consumes.

The cost of sugar has continued to creep upward in the United States despite world surpluses and declining demand. That is because the price is dictated by a government loan program that in effect forces consumers to guarantee profits for the 12,000 sugar growers. As the market has declined, the government has intervened to stabilize domestic production by cutting back imports--punishing suppliers such as the Dominican Republic and some of the Central American states that are dependent for economic survival on their sugar exports.

The U.S. sugar program has no monopoly on iniquity and inequity, however. The European Community’s farmer subsidies, import restrictions and export subsidies have fueled the largest single contribution to the world sugar surplus as the countries of Western Europe have been converted from net importers to massive exporters. And even the inflated American prices are modest when compared with what Cuba earns for the sugar that it sells to the Soviet Union.

There are paradoxes aplenty in the situation--none as fascinating as how the protection of U.S. sugar growers has brought deterioration to the very market that it was intended to protect. The declining per-capita consumption of sugar is directly traceable to artificially inflated sugar prices that have in turn created a growing market for corn-based sweeteners. No wonder members of Congress from corn-producing states are enthusiastic supporters of the sugar program.This has enabled the representatives of the 17 sugar-producing states to deliver the richest farm-subsidy program of all.

The present program will expire next year. Its advocates are busy making sure, however, that its renewal is made a part of the total farm bill required to replace the 1981 legislation that will expire at the end of this month. They know that it will be easier to win concessions as part of a package. The majority in Congress, fortunately, is aware of the political risks of ignoring consumer interests.

Undoing the American loan program, the base for the price-support system, will not be enough. Import quotas that have been imposed since 1982 also should be lifted.