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How Silly Is This? Malaysia Subsidises Sugar So Much People Smuggle It

Most of the world is desperately trying to reduce the amount of sugar people eat. There are calls for taxes on anything which does contain sugar, several places – including the UK – have extra taxes on soda pop because of that sugar content and so on. That sugar consumption is already down from historical levels is something people seem keen not to acknowledge.

Then there’s people at the other end of the silliness spectrum like Malaysia. Who actually subsidise sugar so as to make it cheaper – presumably so that people consume more of it. The problem with such subsidies being that of course people will start to smuggle it. If you can buy something cheap and sell it expensive then why wouldn’t you?

Well, they are:

[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]The Malaysian Maritime Enforcement Agency (MMEA) thwarted an attempt to smuggle out subsidised sugar worth RM50,000 to Indonesia at the country’s waters on Friday, following the arrest of an 18-year-old.
Tawau Maritime Zone Deputy Director (operations) Maritime Commander Mohd Yusri Hussin said the local teen was arrested at 1.5 nautical miles from Sungai Pukol, Sebatik, here, at 5.15pm after a MMEA team in “Ops Pluto” encountered the boat with the suspect on board.
“Initial inspection found the boat was ferrying subsidised sugar without valid documents from the Ministry of Domestic Trade and Consumer Affairs (KPDNHEP) of Tawau,” he said Sunday[/perfectpullquote]

That’s £8 or £9,000 worth of sugar there. There’s got to be a decent price difference between subsidised and free market to make it worth an international boat trip over that sort of sum. And of course if there is such a decent price difference then that’s what encourages people to make the boat trips.

It’s even possible that the Malaysian government is correct in that poor people cannot buy the sugar – for which perhaps read calories or foodstuffs – which they should be able to afford. But this sort of smuggling is exactly why you never should subsidise things, only people. Instead of paying to make sugar cheaper, pay to make incomes higher. That is, raise welfare benefits.

They’re not going to be smuggled over the border, at cost to the government and no benefit to the people, now are they?

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