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No doubt people will arrive shortly to knee-jerk against sugary drink taxes; but would they mind explaining why sugar is made artificially cheap to start with?
by Someone1234 6y ago
No doubt people will arrive shortly to knee-jerk against sugary drink taxes; but would they mind explaining why sugar is made artificially cheap to start with?
Obesity massively increased internationally after the mid-1970s US agriculture policy changes ([0]). Specifically look at corn production after the mid 1970s[1]. One of corn's products is HFCS, the massive influx of this sugar substitute drove international raw sugar prices down until 2007[2].
This had the side effect of sugar being a cheaper food ingredient than most of the alternatives, even in countries that didn't directly import HFCS (since the US was no longer removing as much raw sugar from the market, driving down costs).
A lot of people who bring up HFCS try to paint it as an even less healthy sugar, my point is more nuanced than that: That HFCS is driving down prices and causing more, even raw sugar, to appear in foods as both sugar/HFCS are subsidized by US aggro policy (and tax payer cash) since between mid-1970s and today.
We can pass sugar-drink taxes, but it feels like fixing a leak with duct tape. Instead, we should fix the whole pipe, by changing US aggro policy so that HFCS isn't unnaturally cheap. This will cause both food manufacturers and consumers to consider the healthier and cheaper alternatives.
PS - I'm not against sugar-drink taxes as an interim step.
[0] https://en.wikipedia.org/wiki/Obesity#History https://en.wikipedia.org/wiki/Obesity#History
[1] https://suyts.files.wordpress.com/2012/08/image20.png https://suyts.files.wordpress.com/2012/08/image20.png
[2] https://commons.wikimedia.org/wiki/File:World_raw_sugar_prices_since_1960.svg https://commons.wikimedia.org/wiki/File:World_raw_sugar_pric...
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- snarf21 6y agoYou are exactly right. It is a travesty that the food pyramid is provided by the Department of Agriculture and not the Department of Health and Human Services. USDA whole job is to make and sell food at scale to make sure the country can always be fed. They have an insane conflict of interest. We need to stop propping up corn and soybeans.
- briefcomment 6y ago"This had the side effect of sugar being a cheaper food ingredient than most of the alternatives" What are these alternatives?
- nerdponx 6y agoMaybe one of the alternatives is "higher quality ingredients". In the USA there is a lot of "hidden sugar" especially in cheap commercial restaurant food and packaged/frozen/canned food. I suspect however that it's more about the relative price of sugary food compared to non-sugary food. Imagine if the price of Pepsi had to increase because the price of sugar increased. I'm curious if we have any studies on the price elasticity of demand for sugary food.
- nightski 6y agoSugar is not made artificially cheap. It's actually more expensive in the U.S. due to government control over the market (production, imports, and exports). If the government subsidies/control was not there, the U.S. sugar market would disappear as it cannot compete with the global market. You'd see a massive reduction in sugar prices and a lot of U.S. farms go under. In fact, big customers of the sugar companies lobby for this to happen all the time (think Hershey). They'd love the U.S. sugar industry to collapse. It's a constant battle.
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- cycrutchfield 6y ago>You'd see a massive reduction in sugar prices and a lot of U.S. farms go under. An honest question, why is this a big issue? If US farms are not competitive producing sugar, why are we incentivizing them to do so?
- kemitche 6y agoI don't know if this is the actual reason, but I can see value in a country protecting it's food supply to ensure that long-term, they stay self sufficient. Subsidies that keep production local would be a means to that end.
- cycrutchfield 6y agoWe don’t care about being self-sufficient in avocado production, so why do we care about corn so much? I feel like the self-sufficiency is a post-hoc rationalization and the real reason has more to do with politics and lobbying.
- tikhonj 6y agoA couple of ideas: 1. There are strategic reasons for a country to maintain a strong agricultural sector in case of international instability, war... etc. In today's economy we can't be 100% independent, but we still need some level of independence we wouldn't get without government intervention. 2. Other countries are undercutting our prices for reasons we find unethical: extremely low wages, inhuman working conditions, literal slavery... etc. We can't control other countries directly on these fronts, but we can at least ensure that we do not contribute to those practices ourselves. 3. Other countries are driving prices down through government subsidies in a bid to gain control of the market, and our tariffs compensate for that. I have no clue whether these reasons apply to sugar specifically, or whether the US policy on these questions is proportional and effective. But at least it illustrates that there are reasons why a policy like that makes sense for the country as a whole (and not just for sugar producers).
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- kop316 6y agoI'm not necessarily against sugary drink taxes, my main question is will the tax do what is expected? Without actually seeing the paper (which there isn't a link thus far), I really don't know. What would make sense to me is taxing packaged foods that add sugar/HFCS to make it cheaper. The food that does not add sugar tends to be more expensive, for the reason that the sugar can mask issues with using lower quality ingredients. What irritates me is that without carefully examining each and very package, it is easy to get said foods too. EDIT: Here is a link to the study: https://www.ahajournals.org/doi/10.1161/CIRCULATIONAHA.119.042956 https://www.ahajournals.org/doi/10.1161/CIRCULATIONAHA.119.0...
- Lazare 6y ago> No doubt people will arrive shortly to knee-jerk against sugary drink taxes; but would they mind explaining why sugar is made artificially cheap to start with? It's a bit more complicated than that. US agricultural policy subsidises corn production (driving prices down), but US trade policy keeps cheap sugar out of the country, while US energy policy diverts corn into making biofuels, both of which drive prices back up. It's not clear what the net effect is. Even the impact of corn subsidies alone does not seem to be enormous, however. Some estimates have corn subsidies driving the cost of corn down by ~27%, with flow on effects to the prices of meat, dairy, and yes, HFCS. However, HFCS make up ~3.5% of the cost of a soft drink, and the cost of corn is less than half the total cost of making HFCS, which means the total impact of corn subsidies on the price of a soft drink is a couple of pennies. In other words, if we wanted a sugary drink tax to counteract the impact of corn subsidies in the US, it would probably need to be on the order of 1-2%. Would a 1% tax have any measurable impact on consumption? Unlikely. Meanwhile, Australia has no subsidies, mostly uses sugar (and not HFCS) but has the same obesity patterns as the US. Analysis of obesity and agricultural policy across countries finds no trends. Source: https://grist.org/article/farm-subsidies-bitter-and-sweet/ https://grist.org/article/farm-subsidies-bitter-and-sweet/ Also, small point: > This had the side effect of sugar being a cheaper food ingredient than most of the alternatives, even in countries that didn't directly import HFCS (since the US was no longer removing as much raw sugar from the market, driving down costs). Only in the short term; that effect would have ended years ago. The global price of sugar now is driven by the marginal cost of production in Brazil, mostly. Americans don't consume (much) imported sugar, but they also don't export much HFCS, and most of what they do export goes to a single country (Mexico). There's no glut of "sugar the US would have consumed" on the market. Second, global sugar prices have been pretty flat for the last 20 years; I don't think your link 3 is really showing what you say. You can poke at the chart here: https://www.macrotrends.net/2537/sugar-prices-historical-chart-data https://www.macrotrends.net/2537/sugar-prices-historical-cha... but I'm not sure what I'm meant to be seeing.
- mc32 6y agoFor anecdotal support, let's walk over to Starbucks. The drinks aren't cheap and people pile on the sweet options. You even have the option of no sweetener (which few people take advantage of). I can see if, Sweetened drink = $8.00 Unsweetened = $4.00 And take away the sweetener packets. Yes, that would likely have an effect.
- dominotw 6y ago> No doubt people will arrive shortly to knee-jerk against sugary drink taxes; This was tried in chicago and rolled back because poorer ppl had "knee-jerk against sugary drink taxes". It targeted drinks that poor drank and left out things like chai tea latte.
- sct202 6y agoThat one also taxed artificially sweetened drinks like diet coke as equals to drinks with sugar, like if the goal was to reduce sugar consumption you would want to tax things with less sugar differently. But the fact that everything carbonated that was even a little bit sweetened was taxed the same made it confusing.
- MattDamonSpace 6y agoThe difficulty at this point is that states have little recourse to change corn policy on the national level. They’re forced to take action within their own scope, and a tax is something they can enact.
- pletsch 6y agoThis is sort of the US Dept. of Ag playbook though. They subsidize the hell out of unprofitable ventures. Look at milk for another example, when the USMCA was being negotiated, the US wanted milk tariffs eliminated but refused to quit selling at lower than production costs. [0] [0] https://markets.businessinsider.com/news/stocks/american-dairy-farmers-depend-on-government-subsidies-1015126442 https://markets.businessinsider.com/news/stocks/american-dai...