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WASHINGTON, Feb 29 (Reuters) - The U.S. Agriculture Department used
its best judgment when it set an import quota high enough to allow sugar
processors to forfeit on government loans this year, Agriculture
Secretary Dan Glickman said Tuesday.
``I think we have done the best we could,'' Glickman told reporters
after a speech to the Garden Club of America. He noted that U.S. sugar
beet production has increased dramatically, contributing to current low
prices.
Last fall, after a protracted Clinton administration debate, the
Agriculture Department set the fiscal 2000 sugar import quota at a
nominal level of 1.501 million short tons.
It took that action despite concerns that falling sugar prices could
prompt processors to forfeit stocks to the government for the first time
since 1994.
Under the 1996 farm act, USDA must set the sugar quota above 1.50
million short tons to offer ``non-recourse loans'' to sugar processors.
Below that level, USDA can offer only recourse loans, which are not
forfeitable to the government.
In a move that many industrial sugar users view as a cynical
manipulation of the sugar program, USDA allocated only 1.251 million
short tons of the fiscal 2000 quota.
Most observers doubt USDA will allocate the remaining 250,000 tons
because of huge domestic production this year.
Glickman told reporters he did not want ``to prejudge'' whether
processors would forfeit loans this year.
However, USDA sugar program specialists have already acknowledged
forfeitures are likely because the dramatic drop in U.S. sugar prices
over the past several months.
Processors have placed more than 1 million short tons of sugar under
the loan program.
But because of ``pipeline commitments'' to domestic sugar users,
forfeitures are unlikely to exceed 500,000 short tons, a USDA sugar
specialist said last week. |