Washington — For the first time in more than a decade, the USDA will interfere with the U.S. sugar market when it spends $38 million on sugar in order to reduce the surplus by up to 300,000 short tons. The move, announced this week, is to prevent processors from defaulting on the $700 million in loans the department gave them.
The government will then sell the excess raw sugar to refiners in return for export credits, which will allow them to purchase global sugar at a later date. USDA officials hope the export credits will help alleviate the sugar surplus.
The USDA says it is debating whether to also enact the Feedstock Flexibility Program in which it would sell the sweetener to ethanol producers at a 50 percent discount.
Yesterday, a bipartisan coalition of Representatives introduced an amendment on the House floor that would reform the current U.S. sugar policy, which includes the Feedstock Flexibility program, price-support program and other “market-distorting” provisions, the Coalition For Sugar Reform reports.
NCA President Larry Graham says about the program: “USDA is doing all that is possible to help stave off the very real taxpayer costs that are coming down the pike as a result of the outdated U.S. sugar program, which is in desperate need of reform. American taxpayers, consumers and businesses cannot afford these costs nor the up to $3.5 billion they pay annually in the form of a hidden tax.”
The NCA encourages its members to contact their local Congressional representatives to urge them to support sugar reform.