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Indian Sugar Subsidies Grow Again

If you've developed a wicked case of whiplash keeping track of all the news about Indian sugar subsidies, you're not alone.

First, India announced an export subsidy in February, which it reduced by 32% in May after an outcry from the international community. Then, in June, India caved in to complaints by its sugar sector and reinstated the export subsidy. It then increased tariffs to block sugar imports and boosted ethanol mandates to promote consumption.

Apparently, India was just getting started.

The Indian government, on August 11, announced an increased subsidy rate for exports during August and September. Then, at the end of the month the government added to the handouts and approved a subsidy for cane mills struggling to profit.

India has made a mockery of a free market, but who can blame them. After all, their biggest competitor, Brazil, has been doing it for years.

It's time to get back to the basics and unravel all these government programs.

That's why U.S. producers back a zero-for-zero sugar program that would eliminate all market distorting sugar policies and allow producers to compete on the basis of efficiency.



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