The World of Sugar by Ulbe Bosma

The World of Sugar by Ulbe Bosma

Author:Ulbe Bosma
Language: eng
Format: epub
Publisher: Harvard University Press


Sugar behind Tariff Walls

In 1937, five years after the collapse of the Java sugar industry, the Pasuruan experimental station celebrated its fiftieth anniversary. A jubilee issue of a local newspaper, devoted to the festive occasion, highlighted the station’s role in bringing Java’s sugar industry to global prominence. The special issue conveyed some regret about the generosity with which Pasuruan had shared the fruits of its research with desperate sugar producers around the world, whose cane fields were being destroyed by plant diseases.53 The rapid spread of the POJ 2878 wonder cane, such a hopeful sign of international collaboration to combat plant diseases and safeguard global food production, had quickly emerged as a structural factor in overproduction, as Manuel Rionda, the Spanish-Cuban sugar tycoon had already concluded in 1927.54 POJ 2878’s dominance had resulted in the dismal sight of dumping and the ruin of sugar economies; it was, by extension, one of the causes of the Wall Street Crash of 1929.

Chadbourne’s valiant attempts to rescue global sugar capitalism from the jaws of protectionism were embedded in this tradition of internationalism. But it was also an internationalism that had abandoned the principle of free trade and now tried to find a balance between demand and supply through quotas, to the detriment of cane sugar producers that were economically capable of outcompeting beet sugar. After Wall Street had failed to prod the League of Nations into bringing the Chadbourne agreement under its auspices, some progress toward international, legally underpinned coordination was made with the International Sugar Agreement of 1937. It was supervised by the International Sugar Council, an intergovernmental institute with an office in The Hague and entrusted with the authority to impose punitive sanctions. However, this institution, of which revised versions continued to exist until 1977, could not reverse the marginalization of the open world market for sugar after the decline of Java and Cuba and the refusal of the US and European governments to reduce protections for their domestic sugar producers. The CIBE emerged as the model for other powerful agricultural lobbies that would three decades later shape the European Economic Community’s—and subsequently the European Union’s—common agricultural market, shielding Europe’s farmers from global competition.55

The fundamental weakness of the International Sugar Agreement was its premise that sugar was a global commodity, when governments were increasingly treating it as a national staple. Countries one after another established tariff walls to protect and foster their own sugar industries. Creating price stability on their national markets led to a further shrinking of the international market, which engendered its volatility.56 India led this trend toward protectionism, and Mexico, South Africa, Egypt, and Brazil followed suit by comprehensively modernizing their industries behind protective walls. Their industrial production rapidly increased and, in the case of Egypt, attracted farmers who in the 1920s had been driven back to their peasant sugar making when the factories had not been able to offer attractive prices for their cane.57 In 1933, Brazil’s President Gétulio Vargas established the Institute of Sugar and Alcohol to assist the hard-hit local sugar industry and stabilize prices.



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