Washington — The USDA has extended invitations to solicit bids to the Commodity Credit Corp. to purchase excess sugar from processors to prevent them from defaulting on government loans due at the end of August and September.
The action comes as sugar prices dropped to 20.33 cents a pound Friday, just under the 20.9-cent price at which the USDA predicts forfeitures will occur. Under the 2008 Feedstock Flexibility Program (FFP), the USDA will sell the sugar to bioenergy producers at a loss. Earlier this summer the USDA carried out two similar exchanges in which it awarded re-export credits in exchange for sugar.
The Coalition for Sugar Reform strongly opposes the U.S. sugar program and continues to encourage Congress to modify the policy, an action that is not inclusive of neither the House nor the Senate’s versions of the Farm Bill, which is currently being hashed out in the Senate.
“Despite USDA’s best efforts to manage the sugar surplus, the fact is, the current sugar program is the root cause of U.S. sugar market instability and rising costs to American taxpayers,” the Coalition for Sugar Reform says. “In July alone, USDA was forced to spend nearly $51 million in taxpayer dollars to purchase excess domestic sugar and remove it from the U.S. market — to keep U.S. sugar prices high and U.S. sugar producers profitable. With news that the Feedstock Flexibility Program is being implemented, now taxpayers may potentially have to shell out millions more. None of this is USDA’s fault. Congress mandated the sugar program, and only Congress can fix it.”