NO SUGAR TONIGHT
14 Sep 2003

by Deroy Murdock

CANCUN, Mexico - - The American Sugar Alliance (ASA) scheduled a briefing at the Fiesta Americana Hotel here on Thursday at 4:00 p.m. By 4:15, the only things on the conference room’s dais were four untouched glasses and a pitcher full of ice water dripping with condensation. It soon became clear that this meeting would not occur.

The ASA, defenders of the truly dreadful U.S. sugar program, perhaps decided they could not defend the indefensible and instead chose to hide. (The Washington-based sugar growers’ lobby did not respond when asked to explain why they skipped their own event.) That may have been smart, given inevitable questions about U.S. government price supports and strict import quotas that raise costs and keep Third World cane farmers poor.

Still, for all the help American sugar growers get from U.S. taxpayers, one would think that by now, they would have learned enough manners to call ahead and officially cancel their gathering rather than leave conferees and hotel staffers scratching their heads.

Rather than declare the non-briefing a total write-off, however, I spoke with another of the ASA’s disappointed, erstwhile guests.

David Zimmer is Secretary General of CAOBISCO, the Brussels-based Association of the Chocolate, Biscuit, & Confectionary Industries of the European Union. His British accent, gray hair, tan suit and tieless, blue-checked shirt suggest a successful executive who has let this Caribbean town lighten his worries. And they are legion.

“In the U.S., the price for sugar is somewhere around twice the world price,” he says. “We would find that almost a comparative luxury.” He explains that the EU’s baffling sugar system actually sets intra-EU prices at 3.5 times the world-price! Given these artificially-high, politically-fixed costs, “It is very difficult for us to compete with our processed, finished products on the world market.”

Each EU nation, Zimmer says, essentially is expected to generate a certain amount of sugar, even if it can be produced more efficiently elsewhere. By coincidence, Swedish author Johan Norberg addressed this phenomenon in Canada’s National Post one day earlier. He recently saw three large sugar mills while on summer vacation - - in southern Sweden.

“That’s about as far north as Alaska,” Norberg wrote September 10. “Sweden has a very short summer, the soil is frozen for several months, and the cattle have to be indoors most of the time. Not an ideal place for agriculture, you would think.”

“Portugal never produced sugar beets” before joining the EU, Zimmer notes. “Now it produces sugar beets.”

Thanks to all of this, Europe’s sugar bowl runneth over. Unable to consume all it produces, Europe dumps excess sugar on the world market, thus undercutting Third World farmers. “This becomes a major disruption in terms of the world movement of sugar itself,” Zimmer asserts. He believes this mess will worsen as the EU grows from 15 to 25 countries, and places like Estonia start planting their own sugar crops.

Zimmer says that European sugar users also suffer under national monopolies.

“If you are a Danish cookie maker, you have to get your sugar from one company,” he says. “If that baker tries to buy his sugar from a company across the border in Germany, the German company won’t sell it to them.” Why would they? If the German firm stays out of Denmark, and vice versa, everybody’s happy - - at least among the sugar monopolists. “That’s collusion,” Zimmer says.

He points out that this is a raw deal for consumers, too. “They are paying artificially an exceedingly high price,” Zimmer says, both for table sugar and the vast array of foods that contain sugar. He fears that these inflated, phony prices will hurt new countries that join the EU and thus enter this glazed wonderland of economic distortions.

“That’s going to affect a nice Czech guy with his beer,” Zimmer states. “It’s going to affect buying a chocolate bar, etc. etc. It will hit right across.”

In the long run, Zimmer favors radical reform of how the EU and other governments approach agriculture. For now, he hopes trade deliberations from Cancun to Brussels will lead to “a better way of managing the supply chain, but also ensuring that everybody gets a share of the pizza at the end of the day. At the moment,” David Zimmer concludes, “I see it as being skewed against particularly the least-developed countries."