Sugar Shortage: Real or Hoax?

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Last week the Wall Street Journal reported some bad news for Americans with a sweet tooth: the U.S. faces a sugar shortage so severe, it could "virtually run out of sugar." Big food companies like Kraft Foods Inc., General Mills Inc., Hershey Co., and Mars Inc. wrote a letter to Agriculture Secretary Tom Vilsack warning him of the shortage and asking him to ease trade restrictions on the commodity, which are structured to encourage companies to buy domestic sugar. What if the government doesn't drop the quota on importing foreign sugar? The companies say they'll lay off workers and raise prices on their products--from chocolate bars to breakfast cereal.

Stephen Colbert reacted to the news with his signature dramatic flair. After a Home Alone-style yelp, he ripped open a 5-pound bag of Domino sugar, and poured it over himself. "Can you imagine an America with no sugar?," he asked. "Juice would contain nothing but 10 percent juice. And we'd all be eating uncaramelized apples."



But not everyone is so alarmed about the impending sugar crisis--and some wonder if there's a crisis at all:

"Blame Uncle Sam" The Cato Institute's Daniel Griswold wrote on the libertarian think tank's blog that the shortage is the government's fault and that the US should acquiesce to the food company's request by allowing them to import more foreign sugar: "If the Obama administration wants to encourage the domestic production of sugar-containing products, it should raise the quotas as far as they can and allow American companies to buy sugar at world prices."

American Sugar Shortage? "No way." Slate used its Explainer column to declare there's no domestic sugar shortage--but there is a deficit in the international market because India is experiencing a drought and Brazil is using sugar cane for ethanol. Why shouldn't Americans worry about this? "The United States does not import from this market--we buy directly through preset trade agreements--so those prices do not directly affect domestic rates."

"Manufactured Crisis" After his sugar-soaked melt-down, Colbert invited Marion Nestle, an NYU Professor and Atlantic Food Channel contributor, on the show to calm him down. She called the shortage a "manufactured crisis" created by the conflicting interests of food companies and domestic sugar producers: "The food companies want to have cheap sugar from other countries, and our sugar producers...want to have have all the money from sugar, so they have quotas."

Who cares? Congress will never drop sugar tariffs Atlantic Business' Daniel Indiviglio says we shouldn't expect the food companies vs. sugar producers conflict to end any time soon; the domestic sugar lobby is so strong, Congress would have a hard time easing trade restrictions on foreign sugar. "There are few lobbies as strong as big sugar. Its presence has been felt in Washington for several decades. Even if sugar prices continue to remain high, unless a tangible shortage really develops, I would not expect to see any relief through lowering tariffs. Big sugar's influence in Washington is just too great." Indeed, the American Sugar Alliance issued a statement in response to the food companies' letter saying, "every sugar producer in America has sugar available to sell."

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Eleanor Barkhorn is a former senior editor at The Atlantic.

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