The Puerto Rican government has imposed a surcharge of US$0.14 per pound on sugar sold there. The roughly US$14m collected from the surcharge each year will be distributed to growers by means of the sugar refineries they supply. The funds are intended to prop up the island's sugar industry and save the thousands of jobs which it creates.

The government is now in the process of ceding ownership of one of the island's largest refineries, Central Mercedita, to regional growers. As a result of the surcharge, the new owners plan to boost cane production to 700,000 tons per year, equating to 60,000 tons of refined sugar. Puerto Rico's sugar surcharge, subsidies, and price guarantees are short-sighted given the fact that they will encourage more sugar cane production at a time when sugar producers should be considering alternative food crops which are more in demand at home and abroad.

By Steve Lewis, correspondent