[Marxism] Sugar and Overproduction

Joaquín Bustelo jbustelo at bellsouth.net
Sun Aug 28 21:43:11 MDT 2005


rrubinelli complains about my support for Brazil's WTO complaint against
the euro-imperialist screw-the-third-world Common Agricultural Policy in
sugar.

For decades the EU has been producing $.30-$.60 cents a pound beet sugar
and dumping it on the world market at $.06-$.12 a pound. But the
overwhelming majority of sugar doesn't trade on the world market nor at
world market prices. The "world market" was turned into a dumpster for
the purpose of forcing Cuba to sell below-cost to get dollars. It is a
residual market of leftovers with extremely thin volume that for decades
has traded at below the cost of production. It is characterized by price
movements that are unrelated to supply, demand, or costs of production
but rather to game playing by hedge fund and other speculators.

The world market price of sugar, when it was a world market, was six
cents a pound in 1959. The quota-protected U.S. domestic market internal
price was a couple of cents higher. In recent years the "world market"
price has basically oscillated between 6 and 10 cents a pound. The U.S.
domestic producer price has been in the range of 25-30 cents a pound.
You do the math at how third world countries forced to sell on the
"world market" have been raped.

I haven't checked lately, but the real domestic producer price of sugar
in the North American market was something like a 25 cents a pound, in
Europe around 35 or 40 cents a couple of years ago. I don't know what
the internal price is in Russia or China, I do know that studies done
around 1980 showed Russia was getting Cuban sugar for an implicit price
of around 50 cents a pound, replacing domestic production that cost the
Soviets around a dollar a pound.

(The difference between this implicit price --implicit because the trade
was on a barter basis-- and the fake "world market" dumpster price of
sugar is how the CIA came up with those fabulous numbers for the Soviet
"subsidies" of Cuba. You could with just as much logic have argued that
the subsidy was going the other way, for every "dollar" the Soviets paid
Cuba for sugar allowed the USSR to avoid paying $2 to produce an equal
amount of beet sugar. And, of course, Cuban sugar is sweeter, too,
soaked as it is in sun and socialism.)

The real price of sugar within the national and regional trading blocks
is many times the world market price, and it is there that the
overwhelming majority of sugar (and equivalents, like high fructose corn
syrup) is actually bought and sold, and at prices that have nothing to
do with those of the "world market." These highly manipulated and
political trade arrangements through which sugar is actually exported
work entirely against third world producers. It is a club to enforce
imperialist political and economic domination, to keep the darkies in
line. 

"Sin cuota pero sin bota" -- without the quota but without the boot --
the revolutionary slogan of Cuba in response to Eisenhower's cutting of
Cuba's access to the U.S. sugar market -- needs to become the slogan of
the entire third world.

Europe giving quotas and preferential prices to some poor countries has
to be seen in this framework, one part of a system that imperialism uses
to keep the third world subjugated -- including the "beneficiaries." 

If Europe were serious about giving preferential treatment to third
world sugar procducers, it could easily do so by imposing a tariff on
its own sugar production, so that third world exports could enter the
European market freely --no quotas or other restrictions-- and buying
third world production would be encouraged by a tax on sugar produced
WITHIN the EU. That would only be fair because that, in reverse, is in
essence what Europe has been doing to the Third World for several
hundred years now. 

But never mind that. Europe should just open its markets and do nothing.
No more subsidies. Ditto for the U.S. on sugar and corn and beets. Just
for this once, let the third world countries have a level playing field.

I mention the U.S., because it isn't just the EU, and I mention corn
because high fructose corn syrup (HFCS) competes directly with sugar.
[One of the things I discovered when I lived in Nicaragua was how much
better a Cuba Libre --rum and coke-- tasted with Nica-produced coke. 
Even though it was the same coke syrup from Atlanta or wherever as is
used everywhere else. But beginning in the 1970's, American coke was
adulterated with HFCS, whereas Nica coke was still made with cheap,
unbleached ("direct white") local sugar.]

But corn is used not just for sweetener, but as feed for cattle. It is
highly subsidized. Which screws ranchers in, for example, Argentina.
Although in Argentina's case, until a few years ago, it wasn't even
allowed to export beef to the United States under an early 1900's
regulation supposedly to stop the spread of hoof and mouth disease.

There is no real "free trade" in the products of third world economies.
Not just sugar. Cotton is massively subsidized in the United States to
the detriment of third world producers from Nicaragua to the Nile. NAFTA
meant an invasion of ultra-subsidized U.S. corn that nuked a lot of the
poorest layer of the Mexican peasantry. And by and large, those
countries don't have the resources to subsidize like the U.S.
imperialists do because they don't have the entire world paying them
tribute.

If free trade in sugar were instituted tomorrow the European sugar beet
and U.S. high fructose corn syrup and cane sugar industries would
collapse within a year or two. Their costs are two, three or four times
higher than those of efficient third world producers.

It is a foolish mistake to look at one aspect of these imperialist
policies --relatively better prices for a limited quota of sugar exports
for a few countries-- and say those challenging the imperialist
manipulation of the terms of world trade are wrong.

Now some third world countries, notably Brazil, have developed
sufficient economic strength and relative autonomy from imperialist
domination to pay back the imperialists. Brazilian productions of sugar
and other sweeteners has skyrocketed because of government policies that
promote production of ethanol for use in fuel mixtures. And they're
demanding that, yes, the imperialists play by the rules that THEY
THEMSELVES set up with the WTO. 

The European "subsidy" to "poor" sugar producing countries was just a
dodge, left cover suckerbait for guilty liberals. The responsibility of
the European imperialist NATIONS to PAY for their CRIMES in no way
justifies them using sugar quotas and subsidies to screw other third
world producers, which is exactly what they have done.

Good for Lula for taking the hypocritical white "free trade" regime and
cramming it down the throat of the euroimperialists!

Joaquín






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