Costs of Sugar Protectionism

Economists frequently describe protectionism as politically feasible due to its concentrated benefits and dispersed costs. Sugar protectionism, however, has concentrated costs:

Producers of hard candy, such as Primrose and Brach’s, which closed its Chicago plant in 2004 to move its operations to Mexico, blame their shifting production strategies on one culprit: U.S. sugar subsidies that keep prices of domestic sugar much higher than prices on the world market. In addition, tight import quotas make it hard to import cheaper foreign-produced sugar.

“We haven’t seen a hard-candy company expansion or new factory for many years,” said Rob Hoffman, director of business development for World Business Chicago. [WaPo]

Update: See this post for more information about sugar protectionism.