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October 14, 2004


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Someday, when we have a quiet six to eight hours to spare, over pie and coffee I will describe the truly bizarre history of US milk pricing.

I think the story might go something like this: Romania is a net sugar importer. But it still produces sugar for export. It's getting cheap 300 EUR/ton sugar from Brazil, plus a thirty percent tariff, so call it 400 EUR/ton. It's also selling pricey domestic 600 EUR/ton beet sugar to the EU, but making 50 EUR/ton profit on the deal, since under the quota agreement, it sells for the European stabilized price. However, it is not allowed to repackage cheaper Brazilian sugar as being produced in Romania.

But that still must be only half the story. What happens after Romania joins the EU, while the EU reduces its subsidies?



The United States gov't price supports (subsidies) for cane sugar grown in Hawaii, Florida, Puerto Rico, and other warm regions also distort world market prices. Given the slave/plantation style of agriculture common to the cane industry I'd as soon tax the crop -- heavily -- as subsidize it. OINIC.

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