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And although those candymakers won't deny that countries such as Mexico and Canada also offer more favorable foreign-exchange rates and cheaper labor, they charge that the current U.S. sugar policy puts them at a competitive disadvantage with foreign manufacturers who buy their sugar in the world market and send the final product into the United States.

World raw sugar prices are currently at about 8.40 cents a pound, whereas in the domestic market raw sugar costs 21.50 cents.

John Brooks, president of California-based Adam and Brooks Inc., said his company has moved some operations to Tijuana, Mexico, seeking cheaper sugar, although it still has a factory in Los Angeles. The final products from Mexico are then shipped back into the United States.

"And we're going to see more of this unless the government eliminates or changes the sugar policy," said Brooks, whose company's revenue tops $20 million annually. "We're actually exporting the candy industry" he said.

High sugar prices "put American food manufacturers at a competitive disadvantage," decried George Franklin, vice president for government affairs at Kellogg Co.

He said that Kellogg hasn't taken operations abroad. "But when you're going to source different materials to manufacture sugar-containing products, (the higher U.S. sugar price) is a factor in deciding" where to go.

Greg McCormack, president of Bob's Candy, a candy manufacturer based in Albany, Ga., said his company recently moved a factory it had in Jamaica to Mexico, with the high sugar prices in the United States putting it out of the running. Bob's Candy's annual sales are close to $40 million.

According to the U.S. Department of Agriculture, out of the 3.3 billion pounds of non-chocolate candy consumed in the United States in 1999, about 17 percent was manufactured abroad. That was up from 13.7 percent in 1998 and 11.7 percent in 1997.

The high price of U.S. sugar the result of price supports and tariffs and quotas on foreign imports is also costing U.S. jobs, says the Candy Institute, a Chicago-based economic and community development group, whose financial sponsors include the U.S. Department of Commerce.

On its Website, the institute notes that the decision by Brach Confectionery Co., one of the largest candymakers in the United States, to relocate its production to Mexico or Argentina because of high domestic sugar prices and its aging facilities, will result in the loss of 1,500 jobs.

At the American Sugar Alliance, a Washington-based umbrella group that represents sugar cane and beet growers, chairman Luther Markwart said candymakers complain about sugar policy to disguise their quest for better foreign exchange rates and cheaper labor.

Companies "can pay Mexican wages which are about one-tenth of United States' or take advantage of the weaker currencies," Markwart said. "Usually you don't move your businesses based on one input commodity," he said. "Maybe they do it in the diamond business, but with sugar-containing products you're looking at other factors," he said.

The ASA also argues that while U.S. raw sugar cane and refined sugar prices fell nearly 15 percent and 29 percent, respectively, between 1996 and 2000, the price for candy rose 8 percent, cookies 8 percent and ice cream 14 percent. The accumulated U.S. consumer price index over that stretch rose 17.4 percent.

It's widely recognized that U.S. sugar policy needs adjustment even by the ASA. Import barriers haven't prevented domestic prices from slipping on plentiful supplies, but they remain well above world's prices. As a result, several refineries have been shut down or are up for sale.

Defaults on government loans to farmers have left the government holding a large stockpile of sugar. The domestic market also faces the opening of trade to Mexican sugar under the North American Free Trade Agreement.