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Sugar Policy Drives Out Candy Companies

“Cheaper sugar sends candy makers abroad” says a headline in today’s Wall Street Journal (gated). The article noted that increasingly U.S. candy makers are moving their production to other countries because federal price supports keep domestic sugar prices way above the world market price.

Candy companies, such as Atkinson Candy Co., said it moved 80 percent of its production to Guatemala. “It wasn’t like we did it for profit reasons. We did it for survival reasons,” said the president of the family-owned Texas company. And confectioners aren't the only ones affected by high sugar prices. Besides candy makers, general food producers feel the crunch of high sugar prices, as sugar is an ingredient in breads and baked goods, many canned and preserved fruits and vegetables, and other canned goods. The U.S. Commerce Department found that for every one job saved in the sugar industry because of the U.S. sugar program about three jobs were lost in the candy-making industry.

These food producers blame U.S. sugar policy for keeping the prices high through a system of domestic supply and import restrictions and price support programs that historically have kept U.S. sugar prices double or triple the world price.

And that’s not likely to end soon. The current agriculture bills in the House and the Senate both maintain the costly sugar program, and earlier proposals to reform the system were narrowly defeated.

CEI has long been involved in attempts to reform the sugar program. See here and here and here for more background on the issue.