Restrictions on imports have caused American users to pay much more than the rest of the world for sugar. That gap recently blew out to its widest in a decade.A nearly 100% price premium to the world market is absurd, and I'm not sure how these could possibly be defensible in, say, the WTO.
Mr. Vilsack's comments raised the prospect of increased demand for global sugar and drove prices up 2.7%, or 0.44 cent, to 16.98 cents a pound on ICE Futures U.S. Prices for U.S. domestic sugar dropped 2.1%, to 30.8 cents a pound. That narrowed the gap between the two to 13.82 cents a pound.
Do sugar quotas have any redeeming qualities?
Subsidies get most of the press and credit for distortionary American agricultural policies, but egregiously protectionist sugar quotas may deserve more attention. Not just because lifting them could help Haiti, but because they seem so single-mindedly rent-seeking, with no socially redeeming characteristics I can think of.
Labels:
agricultural subsidies,
quotas,
sugarcane,
trade,
trade policy,
WTO
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