Article on Sugar Subsidies for Classroom Discussion

[#1]

An excellent example to discuss in class when covering price controls, market efficiency, or international trade is the effect of U.S. sugar subsidies. Most Americans do not realize the high price they pay for sugar, mostly because it's such a low price to begin with. But looking at the efficiency of the industry as a whole, the costs are staggering. There are also indirect effects as bakers and candy producers pass on higher costs to consumers, or move to other countries (taking jobs with them) in order to save on input costs.

Sugar Price Supports Are Not So Sweet​

U.S. News and World Report (Sept 5, 2014)

[chiang]

This is an excellent article. I usually bring up the effects of sugar subsidies when discussing trade protectionism toward the end of my micro principles course. Students are always surprised how much is spent protecting the sugar industry in the United States.

[vickyci]

Long, long ago, Hawaiian sugar was king. Then along came transportation and low-cost foreign labor, as well as the sugar beets, and diet fads.... so now Hawaiian sugar plantations (on the Big Island) lie fallow. Someday I'm sure they will be condos... but not for a very long time. There was talk of bagasse, but I think China still does a good job of producing that.

[vazquj1234]

Yes, great example idea!  Students usually don't realize how pervasive these sugar subsidies are, considering how prevalent sugar is in the American diet.  I also remember when Puerto Rico (where I'm from), was a very large exporter of sugar.  I remember driving through the country as a child an seeing sugar cane for miles and miles.  Today, there is basically no sugar production in the Island anymore.