Sugar Value Chain More Labels Sugar It Research Paper

  • Length: 11 pages
  • Sources: 10
  • Subject: Political Science
  • Type: Research Paper
  • Paper: #71810005

Excerpt from Research Paper :

sugar value chain MORE LABELS

Sugar: it gives us energy, in more ways than one. But this comes at a huge cost that is becoming more recognized, which will eventually have to be tallied up as population growth and resource depletion force humankind to re-evaluate consumption patterns all over the globe. The environmental consequences of sugar production have been apparent for centuries but are growing more urgent as production expands, releasing pesticides, crop pests and pathogens, high nitrogen and phosphorus concentration which poisons soils and water; carbon, dust and pollutant emissions from power generation and refining, coliform bacteria and radiation, to name a few examples (International Finance Corporation 1-8). While more carbon emissions from sugar production are becoming offset by converting sugar byproducts into biofuels, this has its own consequences. To the list of environmental externalities from processing sugar, increased production drives deforestation with the resulting loss of emissions depletion, loss of species and human habitat; soil erosion and compaction and the emissions from fossil fuels delivering the primary product refined sugar, often in the form of molasses, to market.

These toxic spillovers pollute the human environment in various, site-specific ways. Imperial Sugar for example is having difficulty complying with water discharge regulations, their annual 10K report to the U.S. Securities and Exchange Commission reveals (Imperial Sugar 15). Imperial also still faces the last of 43 lawsuits surrounding a single industrial accident, as well as product recalls among other social reasons (Imperial Sugar 16). Even more widespread negative social health effects are becoming epidemic, not only from growing sugar consumption, but from society's and institutions' increasing ability to demonstrate causality between refined sugar and liver damage, high blood pressure, and "metabolic changes that lead to diabetes, heart disease and cancer" (Bunim n.p.). These institutional health costs even where totally paid by private individuals, consume scarce social resources and thus raise prices for all other medical supplies and services including insurance, not to mention public indigent health costs for those who can't pay or higher insurance costs for those who never get sick at all paid for by the entire society. Likewise food prices increase as demand for real estate to produce sugar and biofeuls competes up prices farmers pay to grow crops in otherwise distant and less-obviously interconnected microclimates. These social spillovers derive from institutions perpetuated by sugar at every step of the value chain.

These effects are well-documented by some of the highest government and academic institutions. Nonetheless the demand for sugar can plausibly be expected to increase with social factors like population growth and rising incomes where those materialize, at the same time as increasing reliance on biofeuls as fossil fuel substitute drives environmental factors like forest depletion that offsets emissions reductions without altering the fundamental problem, fuel-burning infrastructure that is only beginning to see competition from non-extractive alternatives themselves limited by constraints of storage and transmission. The result is a check-mate scenario where limited environmental resources of geography, carbon storage, population and income growth, social public health and consumption habits intersect such that one of them must eventually give out absent some miraculous social or institutional intervention through technology or sociopolitical organization. This raises the following Research Questions: How did this deadlock arise, given existing institutions? Why doesn't society "just say no" to sugar and replace it with a different input? Why not then just find something else or get rid of it, if these irreconcilable consequences are bad enough now and only threaten to grow more urgent?

This inquiry will seek to describe the institutional, social and political consequences of sugar production from field to fork and beyond, and attempt to identify why and how our cultures keep tolerating damages from this product that become more recognized and documented even as demand increases. While many of the world's largest producers are privately held and thus do not have to report information to regulatory institutions like publicly traded corporations in the U.S. And developed nations, questions of where sugar comes from, how much and who is consuming it can, be imputed or described in the aggregate from international trade flows and government institutions. What lies below these statistics are more hidden questions about the institutions that perpetuate such systems of unsustainable consumption. Is unsustainability a valid assumption? Given social factors of increasing global population growth and real increasing demand (McConnell, Dolman and Haley n.p.) absent other change in existing conditions, what may give out is either western societeis' consumption levels or if not, perhaps human life itself. Why institutional and political systems that propel us toward an apparently inevitable collision with the downside of sugar consumption persist even as the dangers grow increasingly apparent will be the primary research question of this inquiry, with a secondary objective of identifying how these systems remain perpetuated, even if the an exhaustive "who" or "where" remains elusive due to the opacity of proprietary information hidden behind institutions of private intellectual property. These two research questions point to complex and dynamic, seemingly contradictory interests achieving persistent but suboptimal equilibria.

The briefest historical overview sets the stage for modern context. The story of sugar boils down to slavery, colonialism, depletion and expropriation of foreign raw materials by first European, then U.S. And finally global international entrepreneurs seeking to fill a seemingly endless Western craving for a product not found in Europe until after the Age of Exploration, and easy profit derived therefrom. From such auspicious beginnings the modern sugar cube evolved through the Industrial Revolution, Fordism and automation in the U.S. circa World War II, and the resulting mechanized global food industry that is expected to consume 169 million tonnes (metric) of refined sugar over a year spanning 2012-13 out of a 173 megatonne crop which is only expected to increase for the foreseeable future, produced from 1.8 trillion tonnes of raw sugarcane and beets (Organisation for Economic Cooperation and Development 132) over the 2012-13 business year. Brazil is the largest sugar-producing country, producing over 4.5 million tonnes in 2011 compared to U.S. output of 28 million according to the United Nations Food and Agriculture Organization (in American Sugar Alliance, n. p.).

Many of the biggest sugar companies are scattered across the globe, for example Wilmar International, "[o]ne of the top 10 global raw sugar producers as well as the largest raw sugar producer and refiner," with "over 300 manufacturing plants and an extensive distribution network covering China, India, Indonesia and some 50 other countries" (Wilmar n.p.). The largest U.S. producer, fittingly called U.S. Sugar, is privately-owned and does not publish financial information like publicly-traded corporations even though it represents 8% of U.S. sugar production (U.S. Sugar, n.p.). The largest individual confectioner in the world does happen to be in the U.S., Hershey's (Yahoo!Finance 'Top Confectioners"), followed by Imperial Sugar in fifth, again in the U.S. Hershey's has a market value to owners of $13.5 billion and owns subsidiaries in Mexico, Canada, and the rest of the world (Hershey's 119), just for example.

In fact U.S. Sugar was recently purchased in its entirety by the State of Florida in 2008 in order to help clean up the Florida Everglades (Hodges, Mulkey, Spreen and Clouser, n.p.). This previously and subsequently privately-owned corporation employed 1700 at that time refining over 8% of the U.S. beet and cane output into a capacity 700,000 tons of raw sugar. This constituted "one of the largest ever public buyouts of a private company for conservation purposes, and would have significant economic and environmental impacts to the South Florida region and the State," Hodges et al. explain. Where these socio-economic effects play out is through interlinkage to the other suppliers U.S. Sugar bought inputs from, including fuel and utilities; consultations like tax preparation and legal advisement; insurance, training services and a specific list we could not even view until the company became public rather than private. While U.S. Sugar employed 1700, the horizontal linkage to other suppliers meant an approximate job loss of nearly 10,000 full or part-time jobs and sales revenue losses to some $1.5 billion, only about half of which came from U.S. Sugar itself (Hodges, Mulkey, Spreen & Clouser). The rest of the lost revenue not from sugar sales came from indirect and induced impacts of $900 million in sales by input suppliers but also including $480 million in spending by the original 1700 U.S. Sugar employees. The loss in value-added business income, rents, other non-U.S. Sugar employment, dividends and interest income, and all the social effects this missing revenue implies, was projected at about $588 million and $46 million of indirect tax revenue to governments exclusive of federal income taxes, to a sum of about $633 million in value per year that would not be created without U.S. Sugar.

This type of econometric modeling is common. The theory is that the employees and owners (shareholders, in publicly traded firms) make money from U.S. Sugar, and spend it, either capital gains income for owners or paychecks for workers, on other goods and services when they are…

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