Many policies have been put to place to control and protect many parastatals and many financial institutions in the United States of America. However, policies in the agricultural sector have been facing numerous implementation challenges. This is because policies in the agricultural sector, such as the sugar policy in the sugar production industry, are applying double standards. This is because, while the state advocates for policy implementation and practicing of the set rules and regulations, it shields itself from the very rules and regulations it set. By this, the US government controls prices in the sugar industry especially in the local market. This protects the local market from stiff competitions from the international market (Maneka, 1).This paper discusses about the U.S’ price control system on sugar, a controversial agricultural policy and its effect to the Latin American countries’ economies like the Caribbean Island.
The policy is however disadvantageous as the state sometimes sets very high prices on the commodity. Some islands like the Caribbean have been highly affected by this policy, as it is a trade partner with the US and especially in Sugar exportation to the US. Due to the price control policies of the commodity, many economies have been affected. This particularly affects the South American countries and islands. This policy has led to an economic recession in the Caribbean island (Maneka, 1).
For many years now, many companies have failed to progress due to the commodity price control by the US government. This has brought about strained relationships between the United States of America and the South- American based countries, and its islands. Due to its price control on sugar, the US government has been seen to apply unequal measures on the sugar industry as it applies fair measures to its market while on the other hand apply unfair measures to other sugar based companies( Maneka,1).
Cuba has not been left behind in this double standard measure. In recent years, it has taken control of the production and selling of sugar. The head of state was involved in advocating for the exporting of more sugar than what Cuba was producing. This resulted to less sugar in the country for its citizens. This saw a very steep increase in demand and unreasonable hiked sugar prices (Maneka, 1).
Even with the strained trade relationships with the United States of America and the South-American based countries and islands, the International markets still remain to be controlled by the controversial policies. As much as these countries are not developed and lack skilled labor and good machinery, coupled with mismanagement of the states by heads of states, the policy has played a key role in the economic recession of these countries. The policy has for instance seen shut down of very big sugar companies rendering many employees jobless, which adversely affects the economy of those countries (Maneka, 1).
Many financial advisors have tried to intervene in the implementation of this policy and adjusting it or advising the stakeholders to cut short partnership with the United States of America. However, analysis on other markets in the United Kingdom has no better policies either. Trade partnership again has to consider the proximity of the countries exchanging goods and services as it puts into consideration transportation costs. For instance, the Caribbean Island is very close to the United States of America making it financially sensible for it to export its sugar to the United States of America. This makes the Caribbean sugar market vulnerable to the US sugar-price control policy (Maneka, 1).
Many programs are however being put in place to intervene on the sugar prices. As a result, the Farm Bill has been proposed to enable the US policy to manipulate even the local market. This bill if passed will highly affect the current US policy. Many US trade partners especially the sugar producing states are advocating for approval of the bill as it is hoped to save these countries from the unfair sugar price control system (Maneka, 1).
The US governments have stepped in to chip in on the price of sugar. This however does not directly benefit the farmer as the system is done through issuance of loans to sugar companies. The sugar company employees are equally paid poorly. The sugar companies and the government are the ones who therefore end up benefitting as they end up manipulating the sugar prices to their advantage. This calls for putting in place fair policies that will benefit all the stakeholders (Maneka, 1).
The controversial policy has also seen many sugar companies financing political campaigns. The sugar companies on the other hand expect a ‘good reward’ in return from the politicians who promise to advocate for the policy and in ensuring that the government chips in price sugars. The sugar-price control system by the US has also come up with rules and regulations on the limit of the amount of sugar to be bought to the country. Those countries that exceed limit are therefore subjected to very high tax levies. This ends up putting the international sugar companies at a disadvantage (Maneka, 1).
The policy is therefore unfair, and has highly affected many sugar producing companies. The proposed farm bill should therefore be passed to help improve the trade relations with Caribbean and other South-American based states. This will also help relieve the taxpayer from unreasonable high sugar prices.
Maneka, Bilal. “U.S Sugar Subsidies and the Caribbean’s Sugar Economies”. Council on Hemispheric Affairs. 2013. Web