Go Buy Flowers — Not Candy — For Valentine's Day


Reprinted with permission from Daniel Hanson, a Washington, D.C.-based financial adviser.

About two-thirds of all flowers sold in the US are imported from Colombia. In fact, flower import rules were a central part of the negotiations over US-Colombia Free Trade Agreement.

Colombia exports at least 800 million flowers to the US annually for Valentine's Day alone. Colombia directly employs about 190,000 workers in the flower industry, and they hire an additional 20,000 more every year just to meet US Valentine's Day demand. Another 40,000 Colombians work in flower logistics.

Meanwhile, the sugar industry is largely domestic. Big sugar interests in the US are hugely subsidized, and hugely effective at protecting their subsidies.

But the US sugar subsidy program unambiguously pushes up the price of sugar in the US — to the tune of about $4 billion per year. In other words, Americans will pay about $800 million more for Valentine's Day candy than they would without our sugar "subsidies."

For the 30.3 million Americans with diabetes, this could potentially be a good thing. Higher costs are a disincentive to buy.

But most of us like sugar, no matter the cost.

Current import controls effectively peg the price of sugar at 23.3 cents per pound. That's a sugar tax of $10 per month on American consumers, every year for the past 46 years.

The US has fewer than 20,000 sugar farmers, with an average annual income of $2.8 million per year. It's not clear why the US should be subsidizing millionaire sugar farmers anymore.

Meanwhile, the sugar subsidies crush the international price for sugar, reducing the margins earned by sugar cane and sugar beat farmers who are actually poor in underdeveloped nations.

In the case of flowers, freer trade has meant fairer trade — the flower industry serves as a stimulus to Colombia's poorer economy. In the case of sugar, protectionism means corporate welfare.

Go buy flowers instead of candy for Valentine's Day. Poor farmers (and your pancreas) will thank you.