Sweet conflicts of interest

Editor’s note: Our coverage in February of Baton Rouge’s growing Hispanic population (“Latin Rouge”) revealed that not all Coca-Colas are sweetened equally. So we asked economist Nancy L. Sidener to share her thoughts on the bittersweet truth about domestic soda versus imported. Now retired, she taught economics at the University of Colorado and part-time at LSU while she directed the Louisiana Council for Economic Education. She occasionally teaches Lagniappe Studies Unlimited courses.

Have you had a real old-fashioned Coca-Cola lately? Probably not, unless you have ordered one at a restaurant frequented by Hispanics, shopped at a mercado or the ethnic section of a supermarket that sells imported Coke, or bought a Coke when traveling abroad.

I’ve been checking ingredients labels since drinking Coca-Cola in Hong Kong, and noticing that the drink tasted like the cola I drank as a child. I saw it was made with sugar, not high-fructose corn sweetener.

Why would American soft drinks be made with corn sweeteners rather than sugar?

Because it’s cheaper. Why do foreign producers use sugar? Another simple reason—sugar costs less in the rest of the world. Plus, farmers in some of the poorest countries in the world receive lower incomes.

The American price of sugar is two or three times that of the world price because our government limits domestic production, forbids unfriendly nations (such as Cuba) to export to us and imposes quotas on friendly nations.

Sugar producers are loath to give up these indirect subsidies—they donate about $3 million per election to politicians. The Congressional Budget Office estimates the current program, which sells surplus sugar to ethanol producers, could cost taxpayers between $750 million and $850 million over the next five years. The sugar lobby insists it will not cost taxpayers a dime.

But we are not just taxpayers; we are consumers. Higher U.S. prices cost consumers more than $1.5 billion a year. We pay more money for sugar, candy and other products that use sugar. And we get poorer tasting soft drinks.

We sugar-users will benefit if Mexican sugar enters the United States under NAFTA, and if current trade negotiations force us to lower import restrictions and production limits.

Will sugar producers be content with more direct subsidies that will help them shift to other crops? Unlikely—they don’t like to admit they are on the dole.