This Isn’t The Purpose Of Government

From today’s Star (excerpt):

Sugar supply to be increased from Thursday

The Government will add 10% more sugar supply to wholesalers and retailers nationwide from this Thursday until September, said Domestic Trade, Cooperatives and Consumerism Minister Datuk Seri Ismail Sabri Yaakob.

"The additional supply is to meet the high demand for sugar, especially during the coming festive season," he said when winding up the debate on the 10th Malaysia Plan for his ministry in the Dewan Rakyat, here, Tuesday.

Early this month, the Government added 5% to the sugar supply to meet the current demand.

Ismail Sabri said to ensure sufficient sugar supply always, the Government had appointed the relevant associations to supply and distribute the essential commodity to their members.

The government has a positive role in lot of things that impact society, from healthcare, to defense, to education – but acting as a sugar daddy shouldn’t be one of them.

Sadly this is a major consequence of having administered prices – because the tendency is to set prices below the market clearing level (and ours is somewhere about a third below that level), you’re always ending up with a shortfall in production and supply. Which in turn means spending money on securing an imported source to cover the deficit. The flip side of that is because sugar is cheaper than it should be, consumption is also higher than it should be.

The problem with sugar is that, unlike salt, it’s really hard to figure out if you’re taking too much. So this higher consumption is in part going towards over-sweet processed foods, which in all probability would probably taste just as good with less sugar in the mix.

From a socio-economic perspective, the subsidy and price controls on sugar are indefensible. Let’s get rid of them now, please. And while we’re at it, let’s slap a tax on sugar that would help cover its true economic cost in helping foster obesity, diabetes, heart disease and high blood pressure.