The Bitter End

From OPAdministrator Chester Bowles came bad news last week that soured every U.S. housewife. The news: the sugar supply, tighter now than at any time during the war, would be the last commodity freed from rationing--some time next spring, at the earliest. Even worse, the civilian allotment of sugar for the fourth quarter of this year would have to be cut 28%. Why? screamed the housewives.

There was no shortage of reasons. The most obvious was that the war had cut production. The loss of the Philippines had cut out 900,000 tons a year. Cuba, trying to boost production, had cut its sugar cane too close to the ground in 1944. Not only does it take 18 months for the growth to come back to normal, but Cuba this year suffered its worst drought in 86 years, resulting in a sugar loss of 900,000 tons. Hawaiian and Puerto Rican production was way down.

But this was only half the story. The real reason that sugar is so short is primarily the fault of the industry itself. The "unhealthy economics and unholy politics" of sugar make the industry produce too much sugar between wars and too little during them.

Economically, producing sugar is a terrible risk: it requires big capital investment and reaps a microscopic profit margin. This has led to cutthroat competition between the domestic beet bloc and the cane producers in Cuba, Hawaii, Puerto Rico and the Philippines. To protect themselves, the beet men for 25 years operated an intense and effective lobby to get Congress to erect tariff walls and pay subsidies. In 1934 they jammed through a quota system that gave them 25% of the 6,000,000 tons of sugar consumed in the U.S. One of their most cogent arguments for protection: a strong domestic sugar industry would be invaluable in wartime.

But when war came, the beet men could not live up to their promise. In 1942, labor shortages and high costs drove production down. By the end of this year the cumulative loss may be in excess of 2,000,000 tons. Thus the U.S. was forced to turn to Cuba to try to make up the difference. Until the drought, Cuba fortunately produced sugar far in excess of her peacetime quota. Now, the only hope for an end to rationing lies in the ability of Cuba to produce a bumper crop this spring.

Last week the Cuban crop was estimated at 4,500,000 tons. But no one was yet willing to predict that it would be enough.

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