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SUGAR FARMERS WARN: USDA-LOWERED SUGAR PRICES COULD CAUSE LOAN FORFEITURES

 SUGAR FARMERS WARN: USDA-LOWERED SUGAR PRICES
 COULD CAUSE LOAN FORFEITURES
 WASHINGTON, July 9 /PRNewswire/ -- Representatives of the sugar industry from Florida, Louisiana, Texas, California and Hawaii told Congress today that "loan forfeitures" will likely result unless the Bush administration reverses its price-depressing management of the sugar program.
 By law the administration is required to manage the program to avoid loan forfeitures and, therefore, any cost to the U.S. Treasury.
 Fred Hill, vice president and general manager of the Florida Sugar Marketing and Terminal Association, testified before a House Agriculture Subcommittee that, "Florida producers may find themselves in the regrettable position of having to forfeit sugar through no fault of our own but because of poor program management" by USDA.
 Hill said, "The Executive Branch has indeed manipulated management of the sugar program. The express purpose has been to lower the domestic price of raw sugar. This was the same action -- a 2-cent reduction in the loan rate -- advocated by the Executive Branch during consideration of the 1990 Farm Bill. Congress specifically and overwhelmingly rejected that proposal. We believe the Executive Branch has achieved administratively what they were denied by Congress."
 He said what USDA needs to do to rectify the situation is (1) reinstate the price-objective mechanism, known as the "market stabilization price," which it announced annually prior to 1990, (2) extend the current import quota year by three months to relieve the current oversupply of sugar and (3) promptly announce a minimal foreign quota to be effective at the end of the extension.
 Harold R. Somerset, president and chief executive officer of the California and Hawaiian Sugar Company, reiterated the sentiment of other witnesses by charging that policies of the administration have defied the mandates of Congress to maintain sugar price levels and avoid government cost.
 Somerset said, "Hawaii's sugar growers are proud of the fact that the U.S. sugar program has been run at no cost to U.S. taxpayers since 1985. I acknowledge that we would hate to see this enviable record broken. Nonetheless, if the Secretary of Agriculture fails to take action soon to reverse this appalling decline in U.S. sugar market prices, we will have no alternative other than to forfeit our loans when they mature on Sept. 30, 1992."
 The witnesses before Chairman Jerry Huckaby's (D-La.) Cotton, Rice and Sugar Subcommittee charged that the U.S. Department of Agriculture (USDA) has achieved by policy direction what the administration failed to achieve legislatively -- that is, reduce the 18-cent support level of sugar by 2 cents. This has been achieved by setting the import level much higher than need be, the witnesses said.
 Charles Thibaut, a Louisiana sugarcane farmer and member of the American Sugar Cane League, said it is "very important for you to realize who has benefited from the (2-cent) reduction in the price of sugar. ... Certainly the domestic raw sugar industry has not benefited. Equally important, however, is the fact that the American consumer has not benefited from the reduction. ... The only beneficiaries of the depressed price have been the retail merchants and industrial users of sugar who have not passed the savings on to the consuming public."
 Ben Goodwin, general manager of the California Beet Growers Association, said the California growers are faced with disease, drought and a third problem -- "the Department of Agriculture and the manner in which they are administering the sugar program."
 Since 1985, Congress has stipulated that the sugar program will operate at no cost to the taxpayers. With the United States producing about 75 percent of its sweetener needs, the no-cost factor is accomplished by controlling the amount of imports that come into the country. Under this policy, a reasonable and stable price can be achieved above what would cause the industry to forfeit sugar put up as collateral on loans.
 Tudor Uhlhorn, a sugarcane grower and director of the Rio Grande Valley Sugar Growers, Santa Rosa, Texas, criticized the fact that the administration has effectively reduced the price of raw sugar below what Congress had established in the 1990 Farm Bill. He said, "It is hard to maintain faith in a government where the mandate of Congress is ignored and the actions ordered by the USDA are intentionally designed to lower farm income and reward large industrial sugar users."
 -0- 7/9/92
 /CONTACT: Joseph Terrell of the American Sugar Alliance, 202-457-1438/ CO: American Sugar Alliance ST: District of Columbia IN: SU: EXE


DS -- DC002 -- 7774 07/09/92 10:05 EDT
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Publication:PR Newswire
Date:Jul 9, 1992
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