Wes Peterson, professor of agricultural economics, was interviewed for an April 1 NPR story on how protectionist trade policies by the United States have led to unintended consequences in the past.
Peterson discussed steps the U.S. government has taken to support the home-grown sugar industry dating back to the Cuban Revolution of the 1950s.
“Fidel Castro came in and took over,” he said. “And we cut all of our relations with Cuba, a major sugar supplier at the time.”
To encourage more domestic sugar production, the U.S. government imposed strict limits on sugar imports, NPR reported. As a result, Americans now pay almost twice as much for sugar as people elsewhere in the world.
The absolute cost is still fairly low — about 38 cents a pound last year — so for most people, the trade barrier is easily overlooked.
“If you go to the supermarket and buy five pounds of sugar, this is not going to break your food budget,” Peterson said. “But if you’re producing candy and your main ingredient is sugar, this is a big deal.”
The cost of domestic sugar has led many American candy companies to move their operations to other countries, NPR reported.
Customers who use sugar — i.e. most Americans — far outnumber domestic sugar producers, according to the news report. But those producers have a lot of political clout.
“It’s a lot easier to organize to lobby the government if you’re a fairly small, concentrated industry than if you’re a large, diverse group of people like consumers,” Peterson said. “Consumers always have a hard time getting organized, whereas the producers are often very, very effective.”
Peterson said one problem with tariffs is that once they are in place, it is difficult to get rid of them, “because you generate all these vested interests who want to maintain their protection.”
The NPR story aired on dozens of affiliate stations.
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