WASHINGTON (Reuters) - U.S. growers would be allowed to sell cane and beet sugar for use in making ethanol under a House Agriculture Committee proposal -- a signal change for a program that treats sugar solely as a food.
Sugar is part of a 111-page proposal for updating U.S. crop subsidies. The package was written at the direction of chairman Collin Peterson, Minnesota Democrat, and is scheduled for committee debate next week.
Support rates for sugar would rise under the proposal, to 18.5 cents per lb of raw cane sugar and 23.5 cents per lb of beet sugar. They now are 18 cents per lb for cane and 22.9 cents a lb for beet sugar.
By law, the government must run the sugar program at no net cost. The program relies on domestic marketing allotments, when needed, to balance the supply of domestic and imported sugar with U.S. consumption. Tariff-rate quotas control imports.
Under the Agriculture Committee text, the Agriculture Department would set marketing allotments “for domestic human consumption” of sugar for the 2008-12 crop years. Sugar sold “for uses other than domestic human consumption” would be excluded from the limits.
The American Sugar Alliance, a trade group for growers, said the committee proposal would make the sugar program “even stronger” with its “long overdue loan rate increase” and the ethanol provision.
USDA would continue to update periodically its estimates of U.S. production, imports and demand so adjustments could be made as needed in the marketing allotments. By August 1 of each year, USDA would make its first estimate of sugar supply and demand.
One provision of the proposed sugar program said if USDA awards surplus sugar as a reward to growers who agree to reduce production of sugarcane and beets that are already planted, the sugar from those fields can only be used as a bioenergy feedstock.
A related measure would allow USDA to purchase raw, refined or in-process sugar from growers and sell it to bioenergy producers if it would help the sugar program operate at no net cost. The provision is part of a “wish list” of projects that may be added to the new farm law.
The purchases would be made only when necessary and USDA would use competitive bidding to get the best prices.
Our Standards: The Thomson Reuters Trust Principles.