The Origins and Development of the U.S. Sugar Program, 1934-1959 Richard Sicotte University of Vermont
[email protected] Alan Dye Barnard College, Columbia University
[email protected] Preliminary draft. Please do not cite. Paper prepared for the 14th International Economic History Conference August 21-25, 2006 1 Recent trade talks in the WTO indicate that the powerful US sugar lobby continues to be a roadblock to agricultural liberalization. It calls attention to a need for better understanding of the complex quota-based regulations that have governed the US sugar trade for so long. In 1934 the United States shifted its sugar protection policy from emphasizing the tariff to a comprehensive system of quotas. It was revised in 1937. After its suspension for much of World War II, a new Sugar Act was passed in 1948, and further revised in 1951 and 1956. It has been in almost continuous operation since 1934. This paper examines the origins and development of the Sugar Program from 1934 to 1959. Why did the United States adopt sugar quotas? What were the rules set up to implement and govern the policy? How did they function? The sugar quota was adopted after the U.S. government determined that the long-standing policy using the tariff to protect the domestic industry was failing. A principal reason was that the tariff was not raising the price of sugar because, by diminishing the imports of Cuban sugar, it was causing severe decline in wages and costs on that island. In turn, Cuban sugar was being offered at ever lower prices.