The (Not So) Great American Candy Migration

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Posted by Edwin Portugal on Tuesday, December 8th, 2015, 10:00 AM PERMALINK

Just as thousands of birds migrate every year in search of better weather, thousands of jobs in food manufacturing, such as those in the candy-making industry, migrate out of the country in search of cheaper sugar. Who is to blame behind the mass exodus of jobs? The culprit is none other than the federal government. Through the U.S. Sugar Program, the federal government artificially raises the price of sugar in the U.S. to double the world price, just to benefit a small number of sugar farmers.

The U.S. Sugar Program is a relic of Depression-era policy. Its origins start when the federal government passed The Sugar Act of 1934. The original program sought to protect U.S. sugar farmers with generous protectionist policies and special treatment. Since then, the sugar program has ballooned in size, thanks to the efforts of special interests.

Currently, the U.S. Sugar Program encompasses numerous benefits, including generous subsidies, import quotas, marketing allotments, and the “feedstock flexibility program”, in which the government must buy excess sugar and re-sell it at a loss to ethanol plants. In order for sugar producers to reap these generous handouts, taxpayers, consumers, and businesses are subjected to unnecessary economic burdens.

Because of these protectionist policies, the price of sugar in the U.S. is twice the world price. The high price of sugar costs American consumers up to $3.5 billion every year in higher prices for sugar-containing food, and of course sugar itself. For an individual family, the sugar program adds an extra $40 on their grocery bill every year.

Above all industries, food manufacturers that use sugar are harmed the most. The sugar program forces certain manufacturers to seek cheaper sugar abroad, costing thousands of jobs. For instance over the past decade 22% of candy-making jobs have migrated out of the country, three times more than in other manufacturing industries. Food manufacturers such as those in the candy industry must often make these decisions in order to survive. One such candy-maker is the Atkinson Candy Company, which moved 80% of its peppermint-candy business to Guatemala.

Other candy-makers that have been forced out of the country include the Jelly Belly Candy Co. and candy-cane maker Bobs Candies Inc. In regard to the decision to move Bobs Candies, company president Greg McCormack remarked that eliminating candy-making jobs in the U.S. left "a bad taste in your mouth, but it was the medicine you had to take to stay in business."

Simply put, the U.S. Sugar Program is the epitome of crony capitalism, akin to the Export-Import Bank. Since the Depression, this program has caused immense economic harm at the benefit of a small number of sugar farmers.

Above all, the biggest casualty of the sugar program is jobs – the Sugar Program has forced the migration of thousands of good-paying jobs in the food manufacturing industry. Yet unlike the thousands of migrating birds, however, these jobs do not return to the U.S. As ATR President Grover Norquist and Congressman Joe Pitts (R-Pa.) recently wrote in the National Review, we must finally put an end to this expensive, insider sweetheart deal.

Photo Credit: Camille Iman

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