Tim Worstall shows that public health campaigners don’t understand economics:
. . . The European Union is taking the next step in reforming the entirely absurd sugar regime, making it marginally less awful. The public health wallahs are shouting that this might make sugar cheaper, to the point where everyone will explode from eating too much of it.
Controversial agricultural reforms by the European Union could cause sugar levels in food and drink to rise, experts have warned.
Campaigners said it was “perverse” that the EU was planning to lift sugar production quotas at a time when health authorities are advising people to reduce their consumption of the ingredient. . . .
The move is expected to make sugar cheaper for food and drink manufacturers, prompting fears it will encourage them to use rising levels of the ingredient. Dr Aseem Malhotra, science director of Action on Sugar, a campaign group, said it would be “disastrous” for public health.
They’ve really not understood what’s going on here at all.
In the nightmare world of EU agricultural policies the abolition of quota does not mean that prices are going to fall. For what actually happens is that if you grow sugar beet then there’s two prices which you can sell that deformed mangelwurzel to the processor at. One, a guaranteed one, much higher than a free market price, is only available if you have quota to go with your sugar beet. The other price is very much lower than a free market price and almost no one ever tries to grow beet without quota as a result.
The important point about the abolition of quota is not that it abolishes quota. It is that if there is no quota then beet with or without quota cannot gain that guaranteed price. Thus the price on offer to Europe’s sugar beet growers is going to fall: all other things being equal we’ll thus have less beet being grown. And thus less sugar being taken into storage and then subsidised by the EU when it is later dumped on the food manufacturers.
The abolition of quota will lead to less sugar being produced. And the public health campaigners are arguing against the abolition of quota to stop less sugar being produced. . .
Removing quota will not just have economic benefits, contrary to what the campaigners say, it could have health ones too.