Farm Subsidies, Tariffs and Lifesavers

TechCentralStation.Com’s Ryan H. Sanger takes down George W. Bush for his recent statements linking farm subsidies, of all things, to the 9/11 terrorists attacks.

Sanger reports that at the National Cattlemen’s Beef Association meeting in Denver, Bush told the cattlemen that, “It’s in our national security interests that we be able to feed ourselves . . . This nation has got to eat.”
As Sanger notes, given the relatively high levels of obesity in the United States, no one seems in danger of going hungry anytime soon. The truly bizarre thing about U.S. agricultural policy, however, is that it encourages low prices for some commodities while encouraging high prices for others.

On the artificially low price side, Sanger correctly notes that the problem with farm subsidies is that they create an excess of supply which makes farming unprofitable — at which point farmers turn into beggars at the government trough demanding one handout after another.

But the other side of the coin is that the United States uses tariffs and other devices to artificially raise the price of some agricultural commodities. A prime example of this is sugar — tariffs on sugar imports are set at such a high level that sugar in the United States costs up to twice as much as it does elsewhere.

The people who make Lifesavers understand that reality. Until a few months ago the major North American plant producing Lifesavers was located in Holland, Michigan — just a couple hours from where I live. But the high sugar costs in the United States finally took their toll, and the company announced it would close the plant and move to Canada where sugar producers don’t have the same influence. Sugar costs about half as much as it does in the United States, even after the exchange rate is accounted for.

Ah yes, thank goodness those tariffs are there protecting American jobs.


Beast of burden. Ryan H. Sager, TechCentralStation.Com, February 20, 2002.

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