If sugar costs $1.70/kg, but takes 100kgs of sugarcane and over 2000L of water to produce that 1 kg, how is the end product profitable?

Question

If sugar costs $1.70/kg, but takes 100kgs of sugarcane and over 2000L of water to produce that 1 kg, how is the end product profitable?

In: 300

Answer 1

The taxpayer is subsidizing the industry on the roll of about 300-400$ per capita. Its public knowledge, lookup some videos on the sugar cartel its pretty straightforward. tl;dr they lobbied for investments by the government backed by the value of the sugar the companies hold in warehouses. So now the government has to fix sugar prices, because otherwise their sugar-backed investments are worthless. Therefore sugar companies hold the government hostage by their ability to choose to overproduce and fuck shit up. Very roughly speaking.