Distortion of international trade as a result of government participation

Domestic farm subsidies in the North exclude the resources of the South. United States sugar growers, in part as a reward for large contributions to political campaigns, have long enjoyed a system of quotas and prohibitive tariffs against foreign competition. American consumers paid about three times world prices for sugar in the 1980s, enriching a small cartel of US growers, one family of which receives more than $65 million a year as a result of quotas for sugar. However, the sugar industry makes even less sense environmentally than economically. In Florida, the state with the largest production, it depends on a publicly built system of canals, levees, and pumping stations. Fertilizer from the sugarcane fields pollutes the mangrove everglades. Sugar growers, under a special exemption from labour laws, import Caribbean labourers to do the grueling and poorly paid work of cutting cane. As the United States tightened sugar quotas (imports fell from 62 to 15 million tons annually from 1977 to 1987), the Dominican Republic and other nations with climates ideal for growing cane experienced political turmoil and economic collapse. Many farmers in Latin America, however, did well by switching from sugar to coca, which is processed into cocaine -- perhaps the only high-value imported crop for which the USA is not developing a domestic substitute.