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Among OECD countries, US policies ensure the third highest domestic sugar prices, after the European Union and Japan.74 But the industrial countries are not alone: Colombia, Mexico, South Africa, and Turkey all maintain domestic sugar prices higher than the United States.75 Major sugar exporters include Australia, Brazil, China, Colombia, Cuba, the Eu- ropean Union, Guatemala, India, Japan, Mexico, South Africa, Thailand, and Turkey. The fact that several major exporters maintain exceptionally high domestic price levels testifies to the mammoth distortion in sugar production and trade.

While liberalization in sugar trade would be highly desirable, there are good reasons for maintaining high sugar prices as a means of discourag- ing sugar consumption. Sugar-related illnesses are estimated to kill 300,000 adults annually in the United States. A recent World Health Organization (WHO) and Food and Agriculture Organization (FAO) joint report on diet and nutrition confirmed links between sugar and obesity, diabetes, heart, and dental diseases.76 Daily consumption of nondiet soda, a popular drink throughout North America and heavy in sugar or HFCS, is closely linked to weight gain and type 2 diabetes.77 In turn, excessive weight and obesity

74. Average agricultural protection pales in comparison with government support for sugar. During 2001–03, total support to US producers, measured by the producer support estimate, was about 20 percent and remained below the OECD average; support for US sugar pro- ducers averaged above 55 percent during the same period. In the European Union, total sup- port for producers in 2001–03 was about 35 percent, higher than the OECD average of 31 percent; support for EU sugar producers was about 55 percent. In Japan, total support was 58 percent, nearly twice the OECD average; support for Japanese sugar producers was 40 percent. See OECD’s OECD Agricultural Policies 2004: At a Glance and Center for Interna- tional Economics (2002).

75. According to the USDA, the domestic wholesale price for raw sugar in the United States was 18 cents per pound in 2000, and American businesses that need sugar to make their products pay close to 21 cents per pound. By comparison, the following countries support even higher domestic sugar prices, measured in cents per pound and ranked from highest to lowest: Japan (65.4), European Union (30.4), Turkey (27.9), Mexico (25.6), Colombia (21.1), and South Africa (20.9). The world sugar price is about 7 cents a pound. See LMC Interna- tional (2003); Haley and Suarez (2000); and the editorial in the New York Times, November 29, 2003.

76. According to a 2004 study cosponsored by the US Centers for Disease Control and Pre- vention (CDC), the United States spends about $75 billion annually on obesity-related ill- nesses. A recent US CDC study confirmed that obesity-related deaths reached almost 200,000 in 2000. The WHO recommends sugar be restricted to 10 percent of calories consumed. The sugar industry, by contrast, insists a 25 percent sugar intake is safe. See WHO (2003). See also Edward Alden and Neil Buckley, “‘Big Sugar’ Fights to Maintain the Status Quo,” Financial Times, February 26, 2004; Fiona Symon, “Cost of Obesity in the US,” Financial Times, January 22, 2004; and Betsy McKay, “New Doubt Cast on Death Toll from Obesity,” Wall Street Jour- nal, December 3, 2004, A15.

77. See Rob Stein, “A Regular Soda a Day Boosts Weight Gain,” Washington Post, August 25, 2004, A1. The longitudinal study on nondiet soda, involving 50,000 US nurses, was con- ducted with the assistance of the Harvard School of Public Health.



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