Problem
Sometimes the governments of free market countries try to control prices to support an industry rather than the functions of supply and demand. For example, the US government supports various industries with price controls. The US sugar industry has such an control,
The text discusses the sugar price floor. A loan program for sugar farmers creates the price floor. The program allows farmers to borrow money for production expenses from the Department of Agriculture. When a loan falls due, a farmer must repay it, plus interest-unless the price of sugar falls under 18 cents per pound. If that happens, the farmer can repay the loan, at the rate of 18 cents per pound, by turning sugar over to the Department of Agriculture.
Use the following sources to research the loan program.
1. The American Sugar Alliance-"a national coalition...dedicated to preserving a strong domestic sweetener industry." www.sugaralliance.org/
2. Grocery Manufacturers Association supports the Coalition for Sugar Reform-a coalition of organizations representing food manufacturers, environmentalists, and others.
Are you in favor of maintaining the price controls in what is supposed to be a free-market economy? What is the effect on supply and demand? Think about the Covid-19 pandemic and how supply and demand impacted everything from the availability of hand sanitizers to toilet paper? What happened to prices?