Sugar Farmers Applaud USDA Import Quota

November 3, 1999

U.S. sugar farmers support USDA's announced tariff-rate quota of 1.501 million short tons of raw sugar imports in fiscal year 2000. The American Sugar Alliance says producer prices for raw sugar have declined nearly 15% in two months and now are at the lowest level in 14 years; the TRQ should help prices improve.

USDA will establish the fiscal year 2000 raw sugar TRQ at 1.36 million metric tons, or 1.5 million short tons, and make available initially to the U.S. trade representative 1.135 million metric tons raw value, or 1.25 million short tons, for entry into the United States.

Certificates of quota eligibility (CQEs) will be issued to allow Brazil, the Dominican Republic and the Philippines to ship up to 25% of each country's initial allocation at the low-tier tariff during each quarter of fiscal 2000. Argentina, Australia, Guatemala and Peru will be allowed to ship up to 50% of their initial allocations in the first six months of the fiscal year.

Allocations not entered with the U.S. Customs Service during any quarter or six-month period may be entered in any subsequent period. For all countries, CQEs corresponding to each country's allocation may be entered at the low-tier tariff at any time during the fiscal year.

The initially unallocated TRQ quantity of 227,000 metric tons, or 250,225 short tons, will be made available to USTR for allocation, if needed, as the administration reviews market conditions and the operation of the sugar program.

"This (announcement) should restore a degree of confidence to farmers and their lenders and should restore some certainty to the market," says ASA President Rick Dorn, Hardin, MT. "The market badly needed the reassurance this announcement provides."

Sugar program critics noted that the total quota announcement was just large enough to allow USDA to make traditional price support loans to sugar processors. Had the quota been set even 1% lower, the loans would have been "recourse," requiring repayment even if prices fell below the loan rate. The critics noted that almost no market analysts expect USDA to let the total announced quota enter the United States, and questioned whether USDA's announcement complied with legal requirements.