March 7, 2004
By Norbert J. Michel, Ph.D.
Wonder if U.S. Sen. Mary Landrieu has ever run
her views on free trade past a real economist?
I got to pondering this question recently as I was accepting my
Ph.D. from the University of New Orleans. Having read two days
earlier that Sen. Landrieu, like many Louisiana politicians,
opposes a recent move to phase out import quotas on sugar, I
couldn't help but think she should bounce this idea off the man
dishing out the diplomas that night -- UNO chancellor and highly
respected economist Timothy Ryan.
If she ever does, I hope that Ryan, who introduced the senator as
his "longtime friend," sets her straight. That he'll explain to her
that, even if it means short-term hardships for some workers, free
trade holds more promise for Louisiana and the nation than her
efforts to "protect" sugar or any other crop or industry. That
he'll point out that those she wants to "protect" through trade
barriers -- tariffs and import quotas -- would remain in danger of
losing their jobs, and the best way for Louisiana and the nation to
help those workers is not to meddle with the process and divert
resources from their best use.
The fact is, because of foreign competition -- which is not going
away -- American farmers no longer can earn sufficient profit from
sugar. But rather than switch to more profitable crops, these
farmers lobby Congress to restrict imports from foreign countries
or levy tariffs to make foreign sugar uneconomical. As a result,
they prolong their precarious positions, and Americans pay two to
three times what the rest of the world pays for sugar.
Worse yet, most of the support money goes not to struggling family
farmers but to megafarms. Indeed, one Florida family, the Fanjuls,
receive nearly half of all the benefits from the sugar-support
Perhaps Ryan subscribes to the "moderate" view on tariffs -- that
keeping the price of domestic sugar artificially high for a few
years will enable the industry to restructure and move toward more
profitable endeavors. But for how many years? Louisiana sugar
producers have been protected by tariffs almost continuously since
1816. Import quotas on sugar have existed since 1934, except for
one eight-year break that ended when President Reagan
re-established them in 1982.
Despite the assistance, the industry has continued to shrink on its
own. The number of sugar mills in the state has fallen from 46 in
1960 to 24 in 1980 to fewer than 20 today, even though the mills
have become more productive. And now Sen. Landrieu -- and almost
every other Louisiana politician -- opposes the Central American
Free Trade Agreement, a plan that would double import quotas for
sugar but take 15 more years to do it.
What if, rather than propping up Louisiana's sugar industry since
1934, market forces had instead been allowed to dictate the best
uses of the state's land and labor? What would have become of the
state's great sugar plantations? Would they have switched to more
profitable, more dependable crops or -- with the help of those
dollars that went to sugar support -- to non-agricultural
We can't say for sure, but we can say that we'd have paid less for
sugar over the past 70 years. We also can say we would've spent far
fewer tax dollars to enrich a few wealthy landowners and that more
of our land and labor would have been used for more profitable
Moreover, anyone who followed the state's recent election for
governor heard two words repeatedly -- "brain drain." It's a huge
issue in Louisiana, and both candidates rolled out plans to stop
the exodus of the state's educated citizens and create more
opportunities for them at home.
Might more prudent use of the millions that went to "save" the
sugar industry over the last 70 years have prevented this
brain-drain crisis? Again, we can't say for sure. But we can say
that when resources are diverted from their best use for decades on
end, it forces those who are not members of the privileged sugar
families to go elsewhere for opportunities.
Perhaps Chancellor Ryan can inform his "good friend" of that, and
Louisiana's junior senator will consider supporting the Central
American Free Trade Agreement.
Norbert Michel, Ph.D., is a policy analyst
in the Center for Data Analysis at The Heritage
Foundation, a Washington-based public policy
First appeared in The Shreveport Times
Wonder if U.S. Sen. Mary Landrieu has ever run her views on free trade past a real economist?
Norbert J. Michel, Ph.D.
Research Fellow in Financial Regulations
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