Some Effects of Protection in the World Sugar Industry

Abstract

seriously restrain consumption of the commodities in question, and hence the trade in them. It has been pointed out that these restrictive measures reduce sales and prices in world markets, and are harmful to the economies of those countries highly dependent on them. To the best of my knowledge, however, no estimates have been published of the extent to which consumption and production are restrained by these impositions. This omission is no doubt due to a lack of data, in particular of data concerning the elasticity of demand in the main consuming countries. However, for one commodity, sugar, this deficiency has to a large extent been remedied by two recent studies.' With the aid of these studies this article seeks first to give some idea of the extent of protection in the world sugar industry in a selected year, 1959, and then to answer the question: What would the effect on world consumption and trade have been in 1959 if all sugar had been available for consumption at world free-market price levels for raw sugar, allowing for refining and distribution costs ? In particular, the article is concerned with the effect of protection on trade in the world free market. All the calculations are of necessity rough, but are believed to be not so inaccurate as to invalidate the main findings. We begin with a brief account of the pattern and extent of trade and protection. Between one-quarter and one-third of world centrifugal (high-grade) sugar production has been traded internationally in recent years. But less than half this trade has taken place on an open or free market. The remainder has been traded under preferential marketing arrangements-under the British Commonwealth Sugar Agreement or the United States Sugar Act-or has been traded between France, Portugal and the Netherlands and their respective overseas territories, or within the Soviet Bloc. The free market has been very much a residual market, as it still is: just as there are few countries which draw their entire sugar supplies from the free market, so there are few countries whose sugar producers rely on the free market as the sole determinant of their gross proceeds.

Cite this work

No public copy is stored for this record, so only the metadata is cited.

Stored only when both papers are in the corpus — 16 citations exist upstream.